Kencana Agri reports 5.6% rise in CPO production amid rising market demand

Kencana Agri Limited reported a 5.6 percent increase in crude palm oil (CPO) production during the first half of 2026. The company processed 463,104 tons of fresh fruit bunches (FFB), a 3.4 percent increase from the previous year. This growth was supported by an improved oil extraction rate (OER), which rose to 21.4 percent from 21.0 percent in the same period in 2025.

Market analysts project a rise in CPO prices for the second half of 2026. Key drivers include geopolitical risks affecting alternative vegetable oil supplies, potential El Niño weather patterns affecting Southeast Asian productivity, and high demand for biodiesel. Specifically, Indonesia’s B50 biodiesel mandate is expected to tighten global CPO supplies by increasing domestic consumption. Additionally, USDA projections suggest a decrease in Indonesian palm oil production to 47.2 million tons for the 2026-2027 period, further impacting market balance.