Indonesia prepares to implement B40 in January

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

B40 will need additional 3 mln tons feedstock, GAPKI states

Malaysia palm at greatest because mid-2022

India might withdraw import tax hike amid inflation, Mistry says

(Adds analyst comments, updates Malaysia’s palm oil criteria cost)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia’s palm oil output is anticipated to recover in 2025 after an anticipated drop this year, but prices are anticipated to remain elevated due to organized growth of the country’s biodiesel required, industry experts said.

The palm oil benchmark price in Malaysia has increased more than 35% this year, lifted by slow output and Indonesia’s plan to increase the mandatory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric loads compared to an estimated drop of just 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 company Oil World, said he expects Indonesia’s palm oil production to increase by as much as 2 million loads next year after a 2.5 million heap drop in 2024.

While Indonesia’s output is anticipated to enhance, provide from in other places and of other vegetable oils is seen tightening up.

Palm oil output in neighbouring Malaysia is anticipated to dip slightly next year after increasing by an approximated 1 million tons in 2024.

“We would need a recovery in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are declining,” Mielke stated.

‘FRIGHTENING’ PRICE SURGE

The price rise in palm oil in the past 7 weeks has been “frightening” for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

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

The current palm oil premium has actually already caused palm to lose market share versus other oils, Mielke included.

Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric heap in 2025, McGill of Glenauk approximated.

Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the highest considering that mid-2022.

“Sentiment today is red-hot and extremely bullish, we need to beware,” stated Dorab Mistry, director at Indian consumer items company Godrej International.

He anticipated the Malaysian price around 5,000 ringgit and above up until June 2025.

Mielke and Mistry advised Indonesia to

consider postponing

B40 execution on concern about its effect on food consumers.

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

import duty hike

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