Indonesia plans to execute B40 in January

Because case, costs might rally 10%-15% in Jan-March, Mielke says

B40 will need extra 3 mln lots feedstock, GAPKI says

Malaysia palm oil criteria at greatest considering that mid-2022

India may withdraw import tax hike in the middle of inflation, Mistry states

(Adds expert remarks, updates Malaysia’s palm oil criteria price)

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 prices are anticipated to stay elevated due to scheduled growth of the mandate, market analysts stated.

The palm oil benchmark cost in Malaysia has increased more than 35% this year, raised by sluggish output and Indonesia’s strategy to increase the obligatory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top manufacturer Indonesia is anticipated to recover by 1.5 million metric lots compared with an approximated 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 firm Oil World, said he anticipates Indonesia’s palm oil production to increase by as much as 2 million tons next year after a 2.5 million lot 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 tons in 2024.

“We would require a recovery in palm in 2025 because combined exports of soya, sunflower and rapeseed oils are decreasing,” Mielke stated.

‘FRIGHTENING’ PRICE SURGE

The price surge 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 imposes the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million heaps will be needed for B40 implementation, deteriorating export supply.

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

Malaysian palm oil costs 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 given that mid-2022.

“Sentiment right now is red-hot and extremely bullish, we need to beware,” said Dorab Mistry, director at Indian customer goods company Godrej International.

He forecast 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 effect on food consumers.

Meanwhile, Mistry anticipated 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