How Could Indonesia’s Wildfires Affect Pulp and Paper Supply?

Indonesia’s 2026 wildfires have raised concerns about the availability of wood fiber for its pulp mills. As Indonesia is a major pulp producer and exporter, the wildfires could have a broad impact. Although there has been no confirmed widespread damage to commercial pulpwood plantations, the fires are raging amid high demand from the industry for more wood fiber. This raises a pressing question for buyers and producers across Asia: can a market already strained by limited fiber supply withstand a major disruption?

Indonesia produces approximately 11 million metric tons of pulp a year, making it one of the world’s largest producers. As Indonesia's pulp output has grown substantially over the past decade, the industry's demand for pulpwood has increased.

The availability of wood fiber has become an increasingly important issue for Indonesian mills. This year’s fires add to the uncertainty for producers securing pulpwood, and ultimately for customers who depend on their pulp.

Have the Fires Affected Indonesia’s Pulpwood Supply?

Since they began early this year, the fires have swept through several regions connected to pulpwood sourcing. Major Indonesian pulp producers have strengthened fire prevention and response efforts. As of mid-September, however, there was no confirmed widespread destruction of their commercial acacia and eucalyptus plantations.

Whether that situation changes is central to the market outlook. Any significant loss of usable pulpwood could force some reduction in pulp production.

Indonesia’s Forestry Minister has stated that the wildfires could go on until early November. The ministry has also cautioned that satellite hotspots are indications of heat, not confirmed individual fires. Peat fires can continue burning below the surface after visible hotspots decline, and conditions on the ground require verification.

For pulp buyers, the key question is whether the fires are affecting timber plantations and the fiber flows that supply operating mills.

Why Does Wood Fiber Availability Matter Even Without Major Fire Losses?

Indonesia’s expanding pulp industry was already placing greater demands on domestic wood fiber supplies before this fire season. Mills need enough fiber to support current output while preparing for additional capacity.

If domestic supply becomes harder to secure, producers may seek more imported woodchips. That could help sustain pulp production, but it would also increase their exposure to import availability, higher input costs, and competition for fiber from other buyers.

The fires warrant attention even before a major plantation loss or mill curtailment is confirmed because they could compound an existing supply challenge.

Could the Fires Affect Pulp Markets Outside Indonesia?

Yes, if tighter wood fiber supply ultimately limits Indonesian pulp production. Buyers could seek replacement hardwood pulp from other suppliers, potentially changing trade flows and putting pressure on prices in markets that rely on Indonesian output. China, for example, is a major destination for Indonesian pulp.

A price response is not inevitable or necessarily immediate. Buyers and producers will be watching whether fire exposure turns into measurable changes in fiber procurement, mill operations, and pulp shipments. Demand and available supply from other producing regions will also shape the outcome.

The signals to monitor are: confirmation of any significant wildfire damage to pulpwood sourcing areas, changes in woodchip imports, reported fiber constraints, and any adjustments to mill production.

What Should Pulp and Paper Companies Watch Next?

 ResourceWise’s latest Market Insights report, Wildfires Heighten Wood Fiber Supply Risks in Indonesia, looks more closely at where Indonesia’s wildfire risk intersects with pulpwood supply. It examines the country’s growing fiber needs, the role of imported woodchips, and the conditions under which a domestic supply issue could reach the wider hardwood pulp market.  

Download the full report for the data and analysis behind Indonesia’s wood fiber outlook.