GAPKI Warns B50 Could Cut Palm Oil Exports by 5 Million Tonnes, Questions 2027 B60

Jakarta — The Indonesian Palm Oil Association (GAPKI) estimates that a full year of B50 implementation in 2027 could reduce Indonesia's palm oil exports by around 5 million tonnes to 26.5 million tonnes. The association also argues that raising the mandate to B60 in the same year would not be realistic as production comes under pressure and biodiesel demand rises.

GAPKI chairman Eddy Martono presented the projection at a press conference ahead of the 2026 Indonesian Palm Oil Conference on 9 October. The association forecasts 2027 palm oil production at about 56.6 million tonnes, below potential output of 59.5 million tonnes without El Niño pressure. Crude palm oil production is projected at around 52 million tonnes.

B50 changes the allocation of palm oil supplies

GAPKI expects palm oil consumption for biodiesel to rise to 17.4 million tonnes in 2027, when B50 operates for a full calendar year. The additional requirement was less visible in 2026 because the programme started in July and included a transition period.

Eddy said food consumption could not be reduced, making exports the most likely segment to adjust. GAPKI projects exports falling from roughly 31.5 million tonnes to 26.5 million tonnes. The figures are an industry association forecast rather than an official government projection.

Lower Indonesian exports could affect global vegetable oil supplies because the country is the world's largest palm oil supplier. GAPKI said buyers in Europe and India had raised concerns about reduced availability. CPO and competing vegetable oil prices could respond to tighter exports, although the eventual direction would also depend on production elsewhere, demand, stocks and global energy markets.

Funding and fresh fruit bunch price risks

GAPKI highlighted the relationship between export volumes and biodiesel funding. Indonesia's biodiesel incentives have been supported by palm oil export levies. If exports decline, levy receipts could come under pressure just as B50 funding requirements increase.

Eddy warned against automatically closing a funding gap by raising the export levy. In GAPKI's assessment, a higher levy could put downward pressure on domestic palm oil prices and then on fresh fruit bunch (FFB) prices received by farmers. The actual effect would depend on policy design, CPO prices, provincial FFB pricing formulas and market conditions.

The funding question makes the balance between energy security, exports, downstream industry, food supplies and farmer incomes increasingly important. Readers can monitor the CPO price and FFB price pages, while mandate developments are available in the biodiesel mandate database.

GAPKI questions a 2027 B60 mandate

The government has previously said it was preparing to increase the biodiesel blend to B60 in 2027. GAPKI argues that the increase would not be feasible if it coincides with production pressure and the first full year of B50.

Eddy estimated that B60 would require around 2 million additional tonnes of palm oil beyond B50 demand. Under GAPKI's production assumptions, that extra volume would further narrow supplies available for exports and other uses. The association is therefore calling for a supply and funding review before the blend is raised.

The debate does not mean that B60 has been formally cancelled. Until the government issues allocation volumes, quality standards, a schedule and funding rules, B60 remains a policy plan. Actual 2026–2027 production data and the impact of El Niño will be important in deciding whether the higher blend can proceed without placing excessive pressure on the palm oil market.