El Niño & Agricultural Constraints (2024)
Impact: El Niño-related weather events caused lower palm oil yields in Sumatra and Kalimantan.
Policy Response: Indonesian government relaxed some biodiesel blending targets to manage tight palm oil supplies.
Price Effect: Reduced biodiesel output led to glycerine scarcity, increasing prices in both domestic and export markets.
Downstream Effect: Pharma, personal care, and food industries faced input cost increases, passing on price hikes to end-users.
Volatile Feedstock Market & Palm Oil Regulation (2023)
Impact: Volatility in crude palm oil (CPO) prices due to policy changes (export taxes, quotas).
Lower biodiesel profitability prompted temporary production slowdowns, reducing glycerine byproduct volumes.
Price Effect: Domestic prices increased, while export volumes decreased, especially to key markets like China and the EU.
Global Energy and Feedstock Disruption (Russia-Ukraine Conflict, 2022)
Impact: Rising global energy and edible oil prices (notably palm oil) due to supply chain disruptions led to costlier biodiesel and glycerine production.
Indonesia’s Role: Palm oil export restrictions (briefly in place to protect domestic cooking oil supply) disrupted glycerine availability.
Price Effect: Glycerine prices spiked due to feedstock uncertainty and logistic bottlenecks.
Biodiesel Mandate Recovery (2021)
Impact: The Indonesian government reinforced its B30 biodiesel mandate, boosting biodiesel production and, consequently, crude glycerine output.
Price Effect: A supply increase led to a moderation in prices, although demand from personal care and food sectors remained strong.
Export Note: Surplus glycerine was exported, stabilizing domestic prices somewhat.
COVID-19 Pandemic (2020)
Impact: Global demand for pharmaceutical and hygiene products surged, including glycerine used in hand sanitizers, soaps, and disinfectants.
Indonesia’s Response: As a major glycerine producer (from palm-based biodiesel), Indonesia redirected output to meet global demand for pharma-grade glycerine.
Price Effect: Glycerine prices spiked due to tight supply and increased demand in health sectors.