Stakeholders in oil palm industry have projected a rise in global crude palm oil (CPO) prices later this year, citing Indonesia’s new biodiesel policy, tightening global supply, and ageing plantations across major producing regions.

Speaking on developments in the sector, the President , National Palm Produce Association of Nigeria, Alphonsus Inyang, said the global market was already preparing for tighter supplies as Indonesia moves to implement its B-50 biodiesel mandate from July 1, 2026.

According to him, the policy will significantly reduce the volume of crude palm oil available for export because Indonesia, the world’s largest palm oil producer, will divert more production towards domestic biofuel consumption.

“In fact, the future, as early as the later part of this year, we are expecting to see price rise. Prices are going to go north due to some things that have taken place in the sector,” Inyang said.

He explained that under the new biodiesel programme, Indonesia would consume an additional three million tonnes of crude palm oil locally.

“Indonesia will commence the implementation of the B-50 biodiesel mandate, which means that an additional three million tonnes of crude palm oil will be consumed by Indonesia. This means that the three million tonnes that would have been exported will now be used for the biodiesel mandate in Indonesia,” he stated.

Inyang added that Malaysia was also advancing similar biofuel programmes, a development he said would further tighten global supply.

“Malaysia too is not sleeping. They are also working on their own biofuels mandates,” he said.

Beyond biofuel demand, he noted that rising production costs, particularly the high cost of replanting oil palm trees, were discouraging smallholder farmers from renewing ageing plantations, especially in Africa and parts of Asia.

“The high cost of replanting too, more and more especially smallholders are finding replanting very, very difficult to handle. It consumes a lot of money,” he said.

According to him, ageing plantations in Nigeria, other African countries, and Malaysia are already affecting productivity and will contribute to lower supply in the global market.

“So we expect to see prices go up because of shortage of supply as a result of these factors I have mentioned,” Inyang added.

On the domestic market, he called on the Federal Government to intensify efforts to curb the smuggling of crude palm oil and refined vegetable oil products into the country.

“The government will need to do more by policing our borders to make sure that smugglers don’t have their way again in bringing in smuggled products into this country,” he said.

He disclosed that oil palm industry stakeholders recently met with the leadership of the Nigeria Customs Service to seek stronger collaboration in tackling smuggling and protecting local producers.

“Last week, I was part of the delegation of oil palm stakeholders to the high command of the Nigerian Customs Service where we sought collaboration to sustain the fight against smuggling of crude palm oil and vegetable oils into the country so that Nigeria can have more gains from local production and also from refined products,” he said.

Meanwhile, analysts have warned that global crude palm oil prices could surge to as high as $1,500 per tonne before the end of the year, driven by Indonesia’s sweeping biodiesel mandate, the looming threat of El Niño, and persistently elevated crude oil prices.

According to industry analysts cited in a Jakarta Globe report, Indonesia’s planned rollout of B50 biodiesel and the prospect of El Niño disrupting production in major producing countries could significantly tighten global supply.

For Nigeria, which is already grappling with a structural supply deficit and ageing plantations, the outlook presents fresh concerns for manufacturers and consumers alike.

Read Also: Madumere urges Nigerians to embrace peaceful coexistence
Global palm oil consumption currently exceeds 77 million metric tonnes annually. The largest consumers are Indonesia, India, China, Pakistan, and the European Union, according to IndexMundi data. Domestic consumption is driven largely by food processing industries, household cooking, and biofuel production.

Indonesia consumes between 20 million and 22.3 million metric tonnes annually, while India consumes between 8.8 million and 10.1 million metric tonnes. China accounts for between 6.7 million and 6.9 million metric tonnes, while Nigeria consumes between 1.6 million and 1.7 million metric tonnes annually.