Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
Indonesia prepares to implement B40 in January
Because case, prices may rally 10%-15% in Jan-March, Mielke states
B40 will need extra 3 mln loads feedstock, GAPKI states
Malaysia palm oil standard at highest given that mid-2022
India might withdraw import tax hike amid inflation, Mistry says
(Adds analyst comments, updates Malaysia's palm oil criteria price)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is anticipated to recuperate in 2025 after an expected drop this year, but costs are to stay elevated due to scheduled expansion of the country's biodiesel mandate, market experts said.
The palm oil criteria rate in Malaysia has risen more than 35% this year, lifted by sluggish output and Indonesia's strategy to increase the compulsory domestic biodiesel blend to 40% in January from 35% now in an effort to reduce fuel imports.
Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric tons compared to an approximated drop of simply over a million tons this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research study 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 heap drop in 2024.
While Indonesia's output is anticipated to enhance, provide from elsewhere and of other veggie oils is seen tightening.
Palm oil output in neighbouring Malaysia is anticipated to dip a little next year after increasing by an approximated 1 million heaps in 2024.
"We would need a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining," Mielke said.
'FRIGHTENING' PRICE SURGE
The cost rise in palm oil in the past seven weeks has been "frightening" for buyers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.
The Indonesia Palm Oil Association said additional feedstock of around 3 million heaps will be needed for B40 execution, eroding export supply.
The current palm oil premium has actually currently caused palm to lose market share against other oils, Mielke added.
Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric ton 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 consumer goods business Godrej International.
He anticipated the Malaysian rate 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 effect on food customers.
Meanwhile, Mistry expected leading palm oil importer India to withdraw its
import responsibility 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; Editing by John Mair, Jane Merriman and Daren Butler)