Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia prepares to implement B40 in January

Because case, rates may rally 10%-15% in Jan-March, Mielke states

B40 will need extra 3 mln loads feedstock, GAPKI states

Malaysia palm oil criteria at greatest considering that mid-2022

India might withdraw import tax trek in the middle of inflation, Mistry says

(Adds expert remarks, updates Malaysia’s palm oil benchmark cost)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is forecast to recover in 2025 after an anticipated drop this year, however costs are anticipated to stay elevated due to planned growth of the country’s biodiesel required, market experts said.

The palm oil criteria price in Malaysia has increased more than 35% this year, lifted by sluggish output and Indonesia’s plan to increase the obligatory domestic biodiesel mix to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in top producer Indonesia is expected to recuperate by 1.5 million metric lots compared with an approximated drop of just over a million tons this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research study firm Oil World, stated he anticipates Indonesia’s palm oil production to increase 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 enhance, from in other places and of other veggie oils is seen tightening.

Palm oil output in neighbouring Malaysia is expected to dip somewhat next year after increasing by an estimated 1 million tons in 2024.

“We would need a healing in palm in 2025 because combined exports of soya, sunflower and rapeseed oils are declining,” Mielke stated.

‘FRIGHTENING’ PRICE SURGE

The rate rise 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 imposes the so-called B40 policy.

The Indonesia Palm Oil Association said extra feedstock of around 3 million heaps will be needed for B40 execution, deteriorating export supply.

The present palm oil premium has currently caused palm to lose market share versus other oils, Mielke added.

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric load 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 right now is red-hot and extremely bullish, we have to take care,” said Dorab Mistry, director at Indian durable goods company Godrej International.

He anticipated the Malaysian rate around 5,000 ringgit and above till June 2025.

Mielke and Mistry advised Indonesia to

consider delaying

B40 implementation on concern about its effect on food consumers.

Meanwhile, Mistry expected top palm oil importer India to withdraw its

import responsibility 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)