The bullish trend in global edible oil prices is likely to trigger a food versus fuel debate soon, said industry leaders at a global edible oil conference on Friday. Industry leaders from India’s largest palm oil trading partner, Indonesia, said while prices will remain stable around $1,000-1,100 per tonne, the country’s exportable surplus may reduce in the coming years mainly on diversion towards biodiesel.
“There may be another debate of food versus fuel soon, the way edible oil prices are rising globally and countries diverting vegetable oil for biodiesel programme may be under pressure from the global community,” said a panelist at the concluding day of the conference, organised by Indian Vegetable Oil Producers’ Association (IVPA) in New Delhi.
Speaking to businessline separately, Eddy Martono, Chairman of Indonesian Palm Oil Association (IPOA), said the domestic consumption of palm oil in Indonesia is estimated at 25-26 million tonnes (mt), including 15 mt diversion towards biodiesel, leaving a surplus of 25 mt as production is likely to be 50 mt. The palm oil export in 2024 was 29 mt, he said.
Sops for exports
But, he said, as the government targets achieving 50 per cent blending with diesel next year, the requirement of palm oil for biodiesel is expected to rise to 18 mt, reducing exportable surplus further.
If Indonesia’s production remains as it is now and if B50 is implemented, exports will be around 23 mt by 2030 because the demand for food is likely to increase, he said.
“It is still mandatory for companies to blend 40 per cent biodiesel with diesel. The government wants to roll out B50 in 2026. But I think, it is not ready yet,” Martono said, adding as the Indonesian production is almost stagnant it is difficult to implement this policy.
There is also a related problem with palm oil export. “The incentive for biodiesel is from the export levy. So, if exports decline, the levy also dips,” he said and suggested that Indonesia will have to increase production of palm oil to implement B50.
Atma Nirbarata impact
“Price outlook, I think will remain steady like this around $1,000-1,100 per tonne,” he said, and added that steps like reduction of import duty by India will help increase Indonesia’s palm oil export. He said Indonesian palm oil export to India in 2023 was around 6 mt, but declined to 4.8 mt in 2024 and may rise to around 5.5 mt this year.
He agreed that India’s push for self-sufficiency through the oilseeds and oil pam missions may impact imports from Indonesia in the long term. But, he said there would not be any problem as Indonesia also needs a huge quantity for biodiesel programme.
He said Indonesia is trying to expand market in Africa, Egypt and countries in west Asia and did not rule out possibility of a decline to Europe – from 5.7 mt in 2018 to around 3 mt in 2025.
Published on July 25, 2025
