JAKARTA: 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 fertiliser prices driven by the war in Middle East, the head of the country's palm oil producer association said on Wednesday.
GAPKI chairman Eddy Martono said fertiliser 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 fertiliser use.
"If El Nino occurs, this will lead to a decline (in production), and if fertiliser is applied by the end of the semester, it is possible that production could drop by 1 million to 2 million tons," he told reporters.
"Now fertiliser (prices) have risen by 30% due to the war," he said. "We are worried smallholders would not apply fertiliser."
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.
Setiyono, chairman of oil palm farmers group ASPEKPIR, said some fertiliser prices have risen more than 50%, and his group members were using organic fertiliser to cut costs.
Indonesia produced 51.66 million tons of crude palm oil in 2025, a 7.3% increase on an annual basis, according to data from of the country's palm oil producer association GAPKI. - Reuters
