Indonesia Palm Oil Output Seen Recovering In 2025 But Biodiesel
Indonesia prepares to implement B40 in January
Because case, prices might rally 10%-15% in Jan-March, Mielke says
B40 will need additional 3 mln tons feedstock, GAPKI says
Malaysia palm oil criteria at highest because mid-2022
India might withdraw import tax trek in the middle of inflation, Mistry states
(Adds expert remarks, updates Malaysia's palm oil criteria cost)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is anticipated to recuperate in 2025 after an anticipated drop this year, however prices are expected to remain elevated due to scheduled growth of the nation's biodiesel required, market analysts said.
The palm oil criteria cost in Malaysia has risen more than 35% this year, raised 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 decrease fuel imports.
Palm oil output next year in top manufacturer Indonesia is expected to recover by 1.5 million metric loads compared with a projected drop of simply over a million loads this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research company Oil World, stated he anticipates Indonesia's palm oil production to by as much as 2 million lots next year after a 2.5 million lot drop in 2024.
While Indonesia's output is forecast to improve, supply from in other places and of other veggie oils is seen tightening up.
Palm oil output in neighbouring Malaysia is anticipated to dip slightly next year after increasing by an estimated 1 million loads in 2024.
"We would require a recovery in palm in 2025 because combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.
'FRIGHTENING' PRICE SURGE
The rate rise in palm oil in the previous seven weeks has actually been "frightening" for purchasers, Mielke stated, 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 heaps will be required for B40 application, eroding export supply.
The current palm oil premium has actually currently caused palm to lose market share versus other oils, Mielke included.
Malaysian palm oil prices 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 since mid-2022.
"Sentiment right now is red-hot and very bullish, we have to be mindful," stated Dorab Mistry, director at Indian consumer goods business Godrej International.
He anticipated the Malaysian price around 5,000 ringgit and above until June 2025.
Mielke and Mistry prompted Indonesia to
consider postponing
B40 implementation on concern about its effect on food consumers.
Meanwhile, Mistry anticipated leading palm oil importer India to withdraw its
import responsibility walking
imposed 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)