Oil World at IPOC 2025: B50 Needs 2.2 Million Extra Tonnes, Malaysian Palm Could Hit RM5,000

Nusa Dua — Vegetable oil market analyst Thomas Mielke of Oil World has warned that Indonesia's planned B50 biodiesel mandate would require at least 2.2 million tonnes of additional vegetable oil and could trigger a global price spike if it is rolled out in the second half of 2026. Speaking at the Indonesian Palm Oil Conference (IPOC) 2025 in Nusa Dua, Bali, he also said Malaysia's benchmark palm oil price could reach RM5,000 per tonne within six months, while Indonesian palm oil output is projected to fall to 49 million tonnes in 2026.

IPOC 2025 was organised by the Indonesian Palm Oil Association (GAPKI) on 12–14 November 2025 under the theme "Navigating Complexity, Driving Growth: Governance, Biofuel Policy, and Global Trade", according to detikFinance. Mielke set out his views at a press conference on the sidelines of the event, InfoSAWIT reported.

"Good in principle", but supply is not ready

According to InfoSAWIT, Mielke, Editor and CEO of Oil World, described B50 as good in principle but out of step with Indonesia's current vegetable oil production capacity. He estimated the country would need at least 2.2 million tonnes of extra vegetable oil to meet B50 demand, "and likely more". A Reuters report republished in the Malaysian Palm Oil Board (MPOB) news digest gives the same figure but frames it as 2.2 million tonnes of additional palm oil for biodiesel production.

Mielke argued that Indonesia should have expanded planting and output earlier to support such a high blend. Without higher production, he said, implementing B50 would be almost impossible without a significant price surge, with prices jumping first on global markets and then domestically. He described the situation as a clash between energy needs and food price stability.

Price and production outlook

Based on the Reuters report carried by MPOB, Mielke's key projections were:

• Prices: Malaysia's benchmark palm oil contract could rise to RM5,000 per tonne within six months, from a close of RM4,125 on Friday, 14 November 2025.
• Indonesian output: down to 49 million tonnes in 2026 from 49.4 million tonnes in 2025, with the decline continuing into 2027.
• Timing: production would start to be affected from mid-2026.

Mielke linked the expected drop in output to several factors. InfoSAWIT noted that he cited government intervention in the upstream sector, land seizures or ownership changes, changes to profit-sharing schemes and reduced fertiliser use in recent years. The Reuters report added ageing trees and slow replanting.

He called Indonesia's position as the world's largest vegetable oil exporter a major achievement, but warned that large shifts in export volumes could destabilise international markets. His conclusion: rolling out B50 while production stagnates risks extreme price swings that would hurt importing countries and Indonesian consumers alike.

GAPKI more upbeat on supply

Mielke's view contrasts with GAPKI's tone ahead of the conference. GAPKI chairman Eddy Martono, at a press conference in Jakarta on 28 October 2025 reported by detikFinance, agreed that prices would rise if B50 were implemented in the second half of next year. However, the industry expects output to increase next year, helped in part by imports of pollinating insects from Tanzania, whose effect is expected to start showing in 2026 and become clearer in 2027.

These diverging supply outlooks are central to where CPO prices head in 2026, the year the government is targeting for B50. Palm oil and biodiesel prices can be tracked on our prices page.