Indonesia prepares to carry out B40 in January
In that case, prices might rally 10%-15% in Jan-March, Mielke says
B40 will require extra 3 mln lots feedstock, GAPKI says
Malaysia palm oil criteria at highest because mid-2022
India may withdraw import tax hike amidst inflation, Mistry states
(Adds analyst comments, updates Malaysia's palm oil standard cost)
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 costs are expected to stay raised due to planned growth of the country's biodiesel mandate, industry experts said.
The palm oil standard rate in Malaysia has actually risen more than 35% this year, lifted 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 producer Indonesia is anticipated to recover by 1.5 million metric tons compared with a projected drop of just over a million lots this year, Julian McGill, managing 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 increase by as much as 2 million lots next year after a 2.5 million heap drop in 2024.
While Indonesia's output is forecast to improve, supply from somewhere else and of other vegetable 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 loads in 2024.
"We would require a recovery in palm in 2025 because combined exports of soya, sunflower and rapeseed oils are declining," Mielke said.
'FRIGHTENING' PRICE SURGE
The rate surge in palm oil in the previous 7 weeks has actually been "frightening" for buyers, Mielke said, 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 required for B40 implementation, wearing down export supply.
The existing palm oil premium has actually already triggered palm to lose market share against other oils, Mielke included.
Malaysian palm oil prices 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 greatest given that mid-2022.
"Sentiment today is red-hot and incredibly bullish, we have to beware," said Dorab Mistry, director at Indian consumer goods company Godrej International.
He anticipated the around 5,000 ringgit and above till June 2025.
Mielke and Mistry urged Indonesia to
consider postponing
B40 implementation 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
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Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
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