Kalimanatan Fires to Slash Palm Oil Output Amid Drought Conditions
Prolonged dry weather and widespread fires in Indonesia's Kalimantan region are expected to cut palm oil output by 12-15% in the fourth quarter of 2026, according to UkrAgroConsult. This is a significant decline, considering that Kalimantan accounts for more than one-third of Indonesia's palm oil production.
Kalimantan's Central and West provinces contribute around 27% of national output, while East Kalimantan accounts for about 36%. The region has been hit hard by the country's most severe wildfires in 11 years, amid El Niño-linked drought conditions. Official data shows that approximately 202,000 hectares were burned across Indonesia from January to July.
The Indonesian Palm Oil Association (GAPKI) has already cut its 2026 palm oil production forecast for Indonesia by 2.9% due to the fires. However, total output is still expected to remain above last year's level as new plantations enter production.