Bahlil's Policy Rescues Global CPO Prices, Indonesia Can Breathe Easy
Jakarta, CNBC Indonesia - Crude palm oil prices recorded their first positive weekly performance after two consecutive weeks of decline. Based on Refinitiv data in trading on Friday (10/7/2026), the Malaysian benchmark crude palm oil price fell 1.76% to RM4,476 per ton. However, it was still up 0.4% on a weekly basis.
The positive performance of palm oil over the week was driven by increased demand. Exports of Malaysian palm oil products for the 1-10 July period rose 5.1% to 396,261 tonnes from 376,971 tonnes shipped during the 1-10 June period, according to independent inspection company AmSpec Agri Malaysia on Friday.
On the other hand, good news came from Indonesia, which will increase CPO demand going forward. The Ministry of Energy and Mineral Resources has just inaugurated the mandatory 50% biodiesel programme, or B50, which is blended into diesel fuel. The programme itself can halt diesel imports while serving as a step towards a higher renewable energy mix in the future.
Energy and Mineral Resources Minister Bahlil Lahadalia revealed that after B50 is implemented, President Prabowo Subianto has given new instructions to begin exploring the implementation of 60% biodiesel, or B60. Regarding this new task, Bahlil stressed that his ministry will immediately conduct in-depth research to ensure technical readiness and engine durability before the energy blend is increased further.
“The President’s directive to us earlier was to immediately consider and explore, study through good research so that we can increase it to B60. This must be done and this is an effort as an initial start,” he said on the sidelines of the B50 Mandatory Launch event at KM 57 Rest Area of the Jakarta-Cikampek Toll Road, as quoted on Sunday (12/7/2026).
Indonesia’s mandate to increase the palm oil-based biodiesel blend to 50% from 40% will boost crude palm oil usage to between 16.3 million and 17 million metric tonnes from 15.2 million tonnes. Nevertheless, there are concerns about an oversupply of palm oil which capped price gains this week.
The deep price drop during Friday’s trading session was caused by concerns over rising stock levels in Malaysia, according to David Ng, a trader at Kuala Lumpur-based Iceberg X.
Malaysian palm oil stocks rose 4.78%, or 116,123 tonnes, to 2.54 million tonnes in June 2026 from 2.43 million tonnes the previous month, according to the Malaysian Palm Oil Board.
MPOB stated that crude palm oil stocks increased 3.75%, or 48,153 tonnes, to 1.33 million tonnes in June 2026 from 1.28 million tonnes in May 2026. “Processed palm oil stocks surged 5.94% to 1.21 million tonnes from 1.14 million tonnes,” it was stated in the June industry performance report.
Regarding production, MPOB said CPO production rose 8.08%, or 122,450 tonnes, to 1.64 million tonnes from 1.52 million tonnes the previous month, while palm kernel production also increased 8.16% month-on-month to 381,480 tonnes from 352,697 tonnes.
Crude palm kernel oil production fell 0.46% to 174,071 tonnes from 174,871 tonnes in May, while palm kernel meal production rose 1.12% to 195,534 tonnes from 193,362 tonnes.