Wedoany.com Report-Aug. 11, Indonesia’s palm oil exports are expected to decrease to 22.8 million tonnes in MY 2024/25 due to lower demand from key markets like India, China, and the US, combined with the B40 biodiesel mandate’s impact. In contrast, production is projected to grow by 3% to 47 million tonnes in MY 2025/26, driven by favorable weather and sufficient fertilizer use, according to Kedia Advisory.

From October 2024 to May 2025, palm oil prices rose 24% year-on-year, making it less competitive than other vegetable oils. Increased exports to Pakistan and Bangladesh have partially offset declines elsewhere. Market sentiment improved after the US adjusted reciprocal tariffs to 19% and Indonesia signed the Comprehensive Economic Agreement with the EU, potentially lowering future European tariffs. Kedia Advisory notes: “Weather conditions and currency trends will play a crucial role in shaping export performance in the near term.”

Soybean consumption in Indonesia is expected to hold steady at 3 million tonnes in MY 2025/26, driven by the tofu and tempeh sectors. Imports are forecasted at 2.7 million tonnes, with 88% from the US. Despite lower global soybean prices, the rupiah’s depreciation has limited import activity.

Indonesia’s oilseed sector is managing production growth, demand shifts, and trade policy changes, with weather and currency trends significantly impacting short-term export outcomes.