Navigating Uncertainty: Palm Oil Sector Outlook for 2026 Through The Lens of Smallholder Welfare and Sustainability Imperatives

This journal analyzes the prospects of Indonesia's palm oil sector in 2026 by focusing on the welfare of smallholders and the imperative of sustainability. Through a qualitative literature review of scientific publications, IPOSS reports, and policy documents from 2020–2025, this study maps the dynamics of production, B50 biodiesel demand, EUDR pressures, as well as productivity and replanting gaps. The results indicate moderate growth with relatively stable prices, yet smallholders remain vulnerable to price volatility, certification costs, and market barriers. The study emphasizes the acceleration of Smallholder Oil Palm Replanting (PSR), expansion of ISPO, price stabilization, and strengthening data-driven governance to maintain sustainability and welfare.