The EU will delay the anti-deforestation law to next year, environment commissioner Jessika Roswall said on Tuesday.

“This delay is good because it gives the government time to prepare, especially for the smallholders,” said Eddy Martono, chairman of the Indonesian Palm Oil Association (GAPKI).

The law was due to take effect on Dec 30, and would have required operators selling goods including soy, beef and palm oil into EU markets to provide proof their products did not cause deforestation.

Indonesia’s palm oil exports to the EU could rise to about 4 million metric tonnes in 2026, up from an estimated 3.3 million tonnes this year, Martono said.

The Southeast Asian country and the EU concluded a free trade agreement on Tuesday after nine years of talks, with both aiming to boost exports and investment.

Jakarta’s palm oil exports to India are expected to rise to 5 million tonnes in 2025 from 4.8 million tonnes last year, though shipments in 2026 will depend on palm oil prices and those of competing edible oils, Martono said.

The price dynamic is critical because it gives India the flexibility to switch to cheaper alternatives such as soybean oil from Latin America, he said.

In the near term, palm oil shipments could be partially replaced by soyoil, as Argentina’s removal of export duties has made it cheaper than palm oil, potentially drawing price-sensitive buyers, he said.

Top soyoil exporter Argentina on Monday temporarily scrapped its export tax on grains, including soybean products.