# Southeast Asian palm oil production and market trends > Live situation record from CLSTR: https://clstr.news/situations/southeast-asian-palm-oil-production-and-market-trends > Updated: 2026-09-07T23:07:54.000Z. Sources: 16. Developments: 6. In early August 2026, rising diesel costs and fuel shortages in Malaysia and Indonesia threatened palm oil harvests. Smallholders in Sabah, Sarawak, and Sumatra were forced to reduce harvesting frequency due to insufficient diesel subsidies, raising concerns about global edible oil output alongside looming El Niño conditions. By mid-August, Malaysian crude palm oil production showed seasonal strength, rising 9.4% month-on-month to 1.79 million tonnes. While exports increased by 14.5% due to restocking efforts in India, the stock-to-use ratio declined. By late August, crude palm oil (CPO) prices reached their highest levels since December 2024, with futures closing at 5,018 Malaysian ringgit per ton. This rally was driven by fears of El Niño-induced dry weather and expectations that Indonesia’s upcoming B50 biodiesel program in October 2026 would boost domestic demand. Recent updates highlight specific production risks and company performance. Kencana Agri Limited reported a 5.6 percent increase in CPO production for the first half of 2026, supported by an improved oil extraction rate of 21.4 percent. Regarding weather impacts, the Indonesian Palm Oil Association (Gapki) estimates that Indonesian production could decrease by approximately three million tons next year—a 5 percent drop—due to dry conditions making fertilizer application difficult. However, Gapki Chairman Eddy Martono noted this is a downward revision from previous estimates of four to five million tons due to recent rainfall. In Malaysia, the Malaysian Palm Oil Council (MPOC) suggested that the December monsoon might mitigate Super El Niño effects, noting that rainfall between September and November will be critical for 2027 production levels. By early September 2026, CPO markets showed mixed trends. ## Timeline ### 2026-09-07: Palm oil markets show mixed trends amid biodiesel policy calls CPO prices fluctuated at KPBN while Malaysia's derivatives market saw a three-day rise. Meanwhile, Pertamina Patra Niaga called for a single FAME price to support B50 biodiesel competition. 4 sources. https://clstr.news/cluster/palm-oil-markets-show-mixed-trends-amid-biodiesel-policy-calls ### 2026-08-28: Southeast Asian palm oil production faces El Niño risks El Niño weather patterns threaten Southeast Asian palm oil production, with Indonesia facing a potential 3 million ton decrease and Malaysia monitoring monsoon rains to mitigate long-term impacts. 2 sources. https://clstr.news/cluster/southeast-asian-palm-oil-production-faces-el-nio-risks ### 2026-08-22: Kencana Agri reports 5.6% rise in CPO production amid rising market demand Kencana Agri Limited saw a 5.6% rise in CPO production in H1 2026, while market forecasts suggest rising palm oil prices due to Indonesia's B50 biodiesel mandate and geopolitical supply risks. 4 sources. https://clstr.news/cluster/kencana-agri-reports-56-rise-in-cpo-production-amid-rising-market-demand ### 2026-08-20: Crude Palm Oil prices hit highest levels since December 2024 Crude Palm Oil prices have hit their highest levels since late 2024, driven by Indonesia's upcoming B50 biodiesel program and El Nino weather concerns. 2 sources. https://clstr.news/cluster/crude-palm-oil-prices-hit-highest-levels-since-december-2024 ### 2026-08-10: Malaysia palm oil production rises 9.4% amid seasonal strength Malaysian crude palm oil production rose 9.4% in July, while exports increased 14.5% due to Indian demand. Analysts warn of potential supply tightness in 2027 due to El Niño effects. 2 sources. https://clstr.news/cluster/malaysia-palm-oil-production-rises-94-amid-seasonal-strength ### 2026-08-05: Southeast Asian Palm Oil Harvests Hit by Rising Diesel Costs Higher diesel costs and fuel shortages curb palm harvests in Malaysia and Indonesia, while palm oil futures rise on export hopes but face pressure from softer soy and crude oil prices. 5 sources. https://clstr.news/cluster/southeast-asian-palm-oil-harvests-hit-by-rising-diesel-costs --- Cite as: Southeast Asian palm oil production and market trends. CLSTR, https://clstr.news/situations/southeast-asian-palm-oil-production-and-market-trends