B50 Mandate to Buoy Palm Oil Prices Through 2027

Indonesia's B50 biodiesel mandate is expected to support palm oil prices through 2027, according to TA Research data. The market is expected to remain on a positive footing due to strong energy prices and sustained demand from India.

The research house points out that stronger demand for biodiesel and potential weather-related disruptions to supply could provide continued support to CPO prices. However, an improvement in production in the near term could limit the upside.

TA Research also identified El Niño as a significant supply risk for 2027, particularly in Indonesia, where dry weather can impact palm yields with a delay. Higher fertiliser prices may add to production costs, and downstream profitability is expected to remain mixed due to excess refining capacity and strong competition from Indonesian producers.

The research house also noted that the uncertainty surrounding Indonesia's new commodity exchange and export monitoring framework could create volatility in palm oil trade flows until details of the final regulations become clearer.