In Ukraine, UkrAgroConsult reported that CIMB Investment Bank Bhd (CIMB Securities) has maintained its overweight call on the plantation sector, citing Indonesia’s plan to implement a 50% biodiesel blend (B50) mandate by the second half of 2026 as a long-term structural positive for crude palm oil (CPO) demand and prices.
The research house said the move could trigger a potential re-rating of plantation counters such as SD Guthrie, IOI Corp, Ta Ann Holdings and Hap Seng Plantations.
According to CIMB Securities analyst Ivy Ng Lee Fang, the policy follows the successful rollout of the B40 program and completion of its third testing phase. The final B50 trial, which began this year, is expected to conclude within six to eight months and involves testing the blend on ships, trains, heavy machinery and vehicles. Once successful, Indonesia will proceed with a nationwide rollout by 2H26, according to the report.
The B50 initiative is designed to strengthen energy security, improve the trade balance and support domestic CPO consumption by reducing the country’s reliance on diesel imports, it added.
However, CIMB Securities noted that achieving the B50 target could pose feedstock challenges. Deputy Energy Minister Yuliot Tanjung revealed that the country would need about 19.73 million kiloliters (kL) of palm-based fatty acid methyl ester (FAME), which may require an additional 2.3 million hectares of oil palm plantations. As a contingency, the government may first roll out a B45 blend, which needs about 17 million kL of FAME, if feedstock availability becomes a constraint.
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Category: Food & Agriculture
