Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia plans to implement B40 in January

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

B40 will require additional 3 mln loads feedstock, GAPKI says

Malaysia palm oil criteria at highest because mid-2022

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

(Adds analyst remarks, updates Malaysia’s palm oil benchmark price)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is anticipated to recover in 2025 after an expected drop this year, however prices are expected to remain raised due to organized expansion of the country’s biodiesel mandate, industry analysts said.

The palm oil criteria cost in Malaysia has actually risen more than 35% this year, raised by sluggish output and Indonesia’s strategy to increase the necessary 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 anticipated to recuperate by 1.5 million metric heaps compared with an approximated drop of simply 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, stated he anticipates Indonesia’s palm oil production to increase by as much as 2 million heaps next year after a 2.5 million load drop in 2024.

While Indonesia’s output is anticipated to improve, provide from somewhere else 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 estimated 1 million heaps in 2024.

“We would require a healing in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing,” Mielke said.

‘FRIGHTENING’ PRICE SURGE

The price surge in palm oil in the previous 7 weeks has actually been “frightening” for purchasers, Mielke stated, 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, eroding export supply.

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

Malaysian 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 highest considering that mid-2022.

“Sentiment right now is red-hot and extremely bullish, we have to beware,” said Dorab Mistry, director at Indian consumer products business Godrej International.

He forecast the Malaysian cost around 5,000 ringgit and above up until June 2025.

Mielke and Mistry urged Indonesia to

consider delaying

B40 implementation on concern about its influence on food consumers.

Meanwhile, Mistry anticipated leading palm oil importer India to withdraw its

import task 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)