Mandate-driven demand tightens supply
Indonesia’s launch of the B50 biodiesel programme in July 2026 is reshaping global palm oil demand. The mandatory 50% palm oil-based blend, reported by Oils & Fats International and The Jakarta Post, lifts domestic consumption and reduces the volume available for export. The RBI has linked broad-based edible oil price rises to biofuel use, specifically citing Indonesia’s B50 mandate. Market sources quoted by Quantum Commodity Intelligence note that rising Asian mandates are curtailing the discretionary biodiesel blend opportunity, as obligated volumes absorb a larger share of supply.
Nepal-India tariff arbitrage under scrutiny
India’s duty-free edible oil imports from Nepal have surged to Rs146 billion, drawing concern from domestic producers. The Kathmandu Post and livemint report that Nepalese refiners are exploiting a tariff advantage to ship palm oil products into India, undercutting local processors. This trade flow adds to India’s import pressure and complicates the price outlook for palm oil buyers in the subcontinent.
EUDR exempts palm oil waste
The EU Deforestation Regulation explicitly excludes palm oil waste from its scope, as detailed by FoodNavigator. This exemption allows agricultural use of palm oil by-products without the compliance burden faced by virgin palm oil. For European buyers, this could shift some demand toward waste-derived products, but the overall impact on CPO demand remains marginal.
Market outlook
Our model outlook points to a mildly firm 7-day price trajectory, extending the recent upward drift. Malaysian CPO benchmark settled at $1124/MT, up 1.7% session-on-session, supported by tighter supply expectations from mandate-driven demand and normal rainfall across the belt. Buyers should monitor policy developments in Jakarta and New Delhi, as both hold near-term price implications.