Reuters reports that low water on the Kapuas River is restricting palm oil shipments from West Kalimantan and leaving farmers with unsold fruit. The bottleneck is witnessed. Its national effect is unquantified, and regional disruption, national forecasts and crop losses are three different things.
Reuters reported on 19 October that low water on the Kapuas River is restricting palm oil shipments from West Kalimantan, so mills are holding full tanks of processed oil they are unable to ship at normal volumes and have cut purchases of fresh fruit from farmers. The Kapuas carries 40% of the province’s palm oil, according to GAPKI, Indonesia’s palm oil association, data cited by Reuters. That is a concrete economic mechanism: drought interrupts transport, storage fills, processing slows and farmers lose buyers.
Our reading: transport restrictions are hurting mills and farmers in West Kalimantan, and the national production effect remains unquantified. Three questions are easy to blur. How bad is the disruption in West Kalimantan? What is happening to Indonesia’s national output and forecasts? And how much crop has been lost? The reporting answers the first partly, the second only through August, and on the third it reports spoilage without a volume.
Reuters describes sandbanks along the river and several barges and tugboats aground, citing its own witnesses. It puts the drought at about two months so far. Aris Supratman, who heads GAPKI’s West Kalimantan office, told Reuters that 13 of the province’s 50 palm oil mills are affected, roughly half its processing capacity, and estimated that the province’s supply fell about 11% in September from August. Farmer Supendi, 33, waited four days in early October with 7 tons of fruit before being turned away because the mill was full. Indra Rustandi of the smallholder group Apkasindo said farmers who cannot sell have cut fertilizer use by up to 70%.
The problem is older than the Reuters report. Elaeis reported on 2 September that mills in eastern West Kalimantan had full tanks, that Apkasindo’s West Kalimantan chair said mills were buying under a 300 to 400 ton quota, and that farmers were queuing up to three days. JurnalPost reported on 4 September a loaded pontoon aground at Sekadau for more than a month. Indonesia’s oil and gas director general told parliament on 26 August that low rivers were hindering fuel shipments in Kalimantan, and on 29 September Pertamina said it was routing fuel for Sintang through a buffer depot at Tayan because the low water limited tanker access. The bottleneck is wider than palm oil.
Multi Prima Entakai’s manager, Dian Kurniawan, told Reuters the mill usually delivers 2,000 tons in four days by barge but sometimes only 100 tons a day by truck, at three times the cost. That is 500 tons a day against 100, or one fifth (this site’s arithmetic from his figures). On 1 October the mill held 8,200 tons of crude palm oil against 8,500 tons of tank space, and its fruit purchases had fallen from 30,000 tons in July to 10,000 tons in September. Gulat Medali Emas Manurung, who chairs Apkasindo nationally, told Kontan that silting of the Kapuas recurs every dry season and has not been addressed well, and that a small port near Sanggau might ease tank pressure but cannot replace the river. Low rain is one input. Single-route dependence and silting are others, and none of the sources separates them.
Oil in a tank is delayed, not lost. Fruit that mills refuse is a different matter: Reuters reports thousands of smallholders stuck with rotting fruit, which is already damage, though no source gives a volume. Rustandi separately warned that cutting fertilizer could hurt yields if it continues, which is a risk to future harvests. Prices show the squeeze unevenly.
| Price signal | Number | Who | What it covers |
|---|---|---|---|
| One farmer’s offer | Rp 2,650 per kg at a mill six hours away, against Rp 3,400 at his usual mill three hours away (−22%) | Rahmat Wiyono, Sanggau smallholder, via Reuters | One farmer, one comparison |
| Association estimate | Fruit price down Rp 150 to 200 per kg from a normal Rp 2,800 to 2,900 (about −5% to −7%) | Gulat Medali Emas Manurung, Apkasindo chair, via Kontan | Districts along the Kapuas, a trade-group estimate |
One farmer’s 22% gap involved a longer drive to a different mill, and the association’s estimate across the Kapuas districts is much smaller. Neither is a province-wide price series, and the two should not be averaged.
| Layer | What is reported | Source | Status |
|---|---|---|---|
| Regional logistics | Sandbanks, grounded barges, full mill tanks, 13 of 50 mills affected | Reuters; GAPKI West Kalimantan; Apkasindo | Reported and witnessed |
| Regional output | Province supply about 11% lower in September than August | GAPKI West Kalimantan head, via Reuters | Estimate, not a published statistic |
| National production | August: 5.34 million tons, down 0.5% on July. Exports up 12.56%. | GAPKI, 9 October release | Measured, but predates the reported September decline |
| National forecast | 2027: 56.6 million tons, 4.9% below a 59.5 million ton potential | GAPKI chairman, 9 October | Forecast for 2027, tied to dryness and fertilizer |
| Crop-loss volume | No quantified estimate found | None | Spoilage reported, volume unknown |
West Kalimantan produces about 11% of Indonesia’s palm oil, Reuters says. GAPKI’s latest national data are for August: crude palm oil 4.88 million tons, down 0.50% from July, with crude and kernel oil together 5.34 million tons, and total exports up 12.56% to 3.59 million tons. Those figures predate the reported September decline, though not the transport problems, which the early-September reporting above places earlier. Reuters also reports that analysts estimate fourth-quarter output across Indonesian Borneo could fall 12% to 15%. The analysts are unnamed, the area is the whole of Indonesian Borneo, and no method is given, so that range should not be stacked on the Kapuas estimate.
The 19 October Reuters report says GAPKI revised its 2026 national forecast down by 2.9%. We could not match that to GAPKI’s own statements. A Reuters report of 2 September quoted GAPKI’s secretary general, Hadi Sugeng, putting 2027 output 2.9% lower at 56.8 million tons, measured against a 2026 estimate of 58.5 million tons that had itself been trimmed from 58.8 million. GAPKI’s 9 October release gives 2027 output with El Niño at 56.6 million tons, 4.9% below a 59.5 million ton potential. Those forecasts concern next year and cite dryness and skipped fertilizer, not river transport. We do not use 2.9% as a 2026 figure. It may reflect a revision we did not find.
NOAA’s Climate Prediction Center said on 8 October that a strong to very strong El Niño is likely through January to March 2027. Our 15 October post covers BMKG’s two-driver diagnosis of a very strong El Niño plus a positive Indian Ocean Dipole. For West Kalimantan, BMKG’s August climate bulletin put July rainfall at the West Kalimantan climatology station at 139 mm against a normal 208 mm, about 67%, and forecast widespread below-normal rain for September, with October and November mostly near normal. BMKG said on 3 October that the rainy season will arrive gradually in November and December, with parts of Kalimantan starting in November. Reuters says farmers recall the 2015 and 2018 droughts lasting about a month against two so far this year. That is local recollection, not a gauge record.
The rainfall deficit fits the usual El Niño direction. It does not tell us how much of the river’s fall El Niño explains, and no source we read says. For the commodity side of the story, see our earlier commodities coverage.
No gauge reading was published in the reporting we read. The witnessed bottleneck does not depend on one, but how low the river is against past years is unquantified. We cannot separate El Niño from silting, shipping dependence and a delayed rainy season. We cannot give a volume of palm oil or fruit lost. The 13-mill count and its roughly half of capacity are Supratman’s figures as Reuters reports them. Opinions on production differ: Apkasindo’s chairman told Kontan that on agronomic grounds El Niño and heat will not reduce Indonesian crude palm oil productivity, while GAPKI’s forecasts for 2027 are lower. We have not looked at palm oil prices, so this post makes no claim about the market.
Our reading. The Kapuas is a genuine bottleneck, and the evidence for it is good: witnesses, a named mill with figures, a provincial trade body and reporting from early September. What is missing is quantification. The careful sentence is that transport restrictions are hurting mills and farmers in West Kalimantan, that fruit spoilage is reported but losses are unquantified, and that the province makes about 11% of the national total. That is a regional disruption with a plausible El Niño link, and its national production effect remains unquantified.