Indonesia 2026 crude palm oil output to fall due to El Nino, high fertilizer prices, association says

In Malaysia, The Star reported that Indonesia’s crude palm oil output this year may drop by up to 2 million metric tons compared to 2025 due to El Nino-related dry weather and high fertilizer prices driven by the war in Middle East, according to the head of the country’s palm oil producer association.

GAPKI chairman Eddy Martono said fertilizer prices have risen by 30% after the war broke out in Middle East, and worried smallholders – who account for 37% of Indonesia’s palm oil plantation areas – may reduce or postpone fertilizer use.

“If El Nino occurs, this will lead to a decline (in production), and if fertilizer is applied by the end of the semester, it is possible that production could drop by 1 million to 2 million tons,” he said.

Indonesia, the world’s largest palm oil producer, is expected to experience a longer and more severe dry season in 2026 compared to last year, the country’s meteorological agency warned, raising the likelihood of drought.