Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
Indonesia plans to carry out B40 in January
In that case, prices may rally 10%-15% in Jan-March, Mielke states
B40 will need extra 3 feedstock, GAPKI says
Malaysia palm oil standard at highest considering that mid-2022
India may withdraw import tax trek amid inflation, Mistry states
(Adds expert comments, updates Malaysia's palm oil criteria cost)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recuperate in 2025 after an anticipated drop this year, but rates are anticipated to remain elevated due to planned growth of the nation's biodiesel mandate, industry analysts stated.
The palm oil benchmark cost in Malaysia has increased more than 35% this year, lifted by sluggish output and Indonesia's plan to increase the necessary domestic biodiesel mix to 40% in January from 35% now in an effort to lower fuel imports.
Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric lots compared with a projected drop of simply over a million tons this year, Julian McGill, handling director at Glenauk Economics, informed 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 tons next year after a 2.5 million lot 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 anticipated to dip somewhat next year after increasing by an approximated 1 million tons in 2024.
"We would need a healing in palm in 2025 because combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.
'FRIGHTENING' PRICE SURGE
The cost surge in palm oil in the previous seven weeks has been "frightening" for purchasers, Mielke stated, adding 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 loads will be required for B40 execution, deteriorating export supply.
The current palm oil premium has actually already caused 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 right now is red-hot and extremely bullish, we have to beware," stated Dorab Mistry, director at Indian consumer goods company Godrej International.
He forecast the Malaysian price around 5,000 ringgit and above until June 2025.
Mielke and Mistry urged Indonesia to
think about delaying
B40 execution on issue about its influence on food customers.
Meanwhile, Mistry anticipated leading 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; Editing by John Mair, Jane Merriman and Daren Butler)