"The biodiesel mandate is driving up domestic use, with food consumption followed by energy or biodiesel demand," GAPKI chairman Eddy Martono said on Monday.
Speaking during a webinar hosted by the Institute for Development of Economics and Finance (INDEF), Eddy added that Indonesia was the world's largest producer as well as consumer of CPO, accounting for 57 percent of global output and 27 percent of global use.
He also acknowledged production challenges, such as land conflicts and the need to rejuvenate smallholder plantations with new plants, but stressed the priority was supplying local biodiesel and food industries.
Eddy continued that CPO prices were expected to remain strong through the end of 2025 at an estimated range of US$1,100-1,200 per tonne, with a potential to reach a spot price of $1,300 on CIF Rotterdam.
"Global vegetable oil demand continues to rise while production in Indonesia and Malaysia has stagnated, supporting high prices," he said.