Indonesia Palm Oil Policy Set For Major 2027 Shift, GAPKI Flags Tighter Supply & Firmer Global Prices

Indonesia is on the brink of implementing significant policy changes to its palm oil industry in 2027, according to the Indonesian Palm Oil Association (GAPKI). These reforms could tighten export supplies and potentially lead to higher global palm oil prices, according to Dr Mohamad Fadhil Hasan, GAPKI's Head of Foreign Affairs.

The reforms will focus on export governance, commodity pricing, and domestic biodiesel consumption. The proposed single-gate export system will centralize oversight of shipments and foreign-exchange flows, putting greater influence in Indonesia's hands. Additionally, the launch of the Strategic Minerals and Commodities Exchange (BMKS) is expected to establish an independent Indonesia Reference Price for commodities, reducing reliance on overseas benchmarks.

Meanwhile, Indonesia is also moving towards full implementation of its B50 biodiesel mandate by 2027, which would require biodiesel to account for 50 percent of the fuel blend. While domestic production capacity may be sufficient to support this program, higher domestic consumption for biodiesel could result in less crude palm oil available for international markets.