Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel
Indonesia plans to execute B40 in January
In that case, prices might rally 10%-15% in Jan-March, Mielke states
B40 will require extra 3 mln lots feedstock, GAPKI says
Malaysia palm oil benchmark at greatest since mid-2022
India may withdraw import tax hike amidst inflation, Mistry says
(Adds analyst comments, updates Malaysia’s palm oil standard price)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is forecast to recuperate in 2025 after an expected drop this year, however rates are to remain elevated due to planned expansion of the nation’s biodiesel required, market experts said.
The palm oil criteria cost in Malaysia has increased more than 35% this year, lifted by slow output and Indonesia’s plan to increase the compulsory domestic biodiesel mix to 40% in January from 35% now in an effort to reduce fuel imports.
Palm oil output next year in top manufacturer Indonesia is expected to recover by 1.5 million metric loads compared to a projected drop of just over a million heaps this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research firm Oil World, stated he expects Indonesia’s palm oil production to increase by as much as 2 million heaps next year after a 2.5 million lot drop in 2024.
While Indonesia’s output is anticipated to improve, supply from elsewhere and of other veggie oils is seen tightening.
Palm oil output in neighbouring Malaysia is expected to dip a little next year after increasing by an approximated 1 million heaps in 2024.
“We would need a healing in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing,” Mielke said.
‘FRIGHTENING’ PRICE SURGE
The cost surge in palm oil in the previous seven weeks has actually been “frightening” for purchasers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.
The Indonesia Palm Oil Association stated additional feedstock of around 3 million tons will be required for B40 implementation, eroding export supply.
The present palm oil premium has actually currently triggered palm to lose market share versus other oils, Mielke added.
Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric lot in 2025, McGill of Glenauk estimated.
Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the greatest because mid-2022.
“Sentiment today is red-hot and incredibly bullish, we need to take care,” stated Dorab Mistry, director at Indian consumer items company Godrej International.
He anticipated the Malaysian price around 5,000 ringgit and above up until June 2025.
Mielke and Mistry urged Indonesia to
think about delaying
B40 application on concern about its influence on food customers.
Meanwhile, Mistry anticipated leading palm oil importer India to withdraw its
import duty walking
enforced from September after elections in the state of Maharashtra in November. ($1 = 4.3800 ringgit) (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy; Editing by John Mair, Jane Merriman and Daren Butler)