Indonesia plans to execute B40 in January
In that case, costs may rally 10%-15% in Jan-March, Mielke states
B40 will require extra 3 mln tons feedstock, GAPKI states
Malaysia palm oil benchmark at greatest since mid-2022
India might withdraw import tax trek amid inflation, Mistry states
(Adds analyst comments, palm oil standard rate)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recover in 2025 after an expected drop this year, but costs are expected to remain elevated due to planned expansion of the country's biodiesel mandate, market analysts stated.
The palm oil standard cost in Malaysia has actually risen more than 35% this year, raised by sluggish output and Indonesia's plan to increase the necessary domestic biodiesel blend to 40% in January from 35% now in an effort to lower fuel imports.
Palm oil output next year in leading manufacturer Indonesia is anticipated to recuperate by 1.5 million metric tons compared to an estimated drop of simply over a million heaps this year, Julian McGill, handling director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research company Oil World, said he expects Indonesia's palm oil production to increase by as much as 2 million lots next year after a 2.5 million heap 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 slightly next year after increasing by an estimated 1 million heaps in 2024.
"We would require a recovery in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke stated.
'FRIGHTENING' PRICE SURGE
The rate surge in palm oil in the previous seven weeks has been "frightening" for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.
The Indonesia Palm Oil Association said extra feedstock of around 3 million tons will be needed for B40 execution, wearing down export supply.
The present palm oil premium has actually already triggered palm to lose market share against other oils, Mielke added.
Malaysian palm oil rates 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 highest because mid-2022.
"Sentiment right now is red-hot and extremely bullish, we have to be cautious," said Dorab Mistry, director at Indian durable goods company Godrej International.
He anticipated the Malaysian cost around 5,000 ringgit and above up until June 2025.
Mielke and Mistry advised Indonesia to
think about delaying
B40 implementation on issue about its impact on food customers.
Meanwhile, Mistry expected leading palm oil importer India to withdraw its
import task hike
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
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Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel
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