Indonesia prepares to carry out B40 in January
In that case, prices may rally 10%-15% in Jan-March, Mielke says
B40 will need extra 3 mln tons feedstock, GAPKI states
Malaysia palm oil standard at highest given that mid-2022
India might withdraw import tax hike amid inflation, Mistry states
(Adds expert comments, updates Malaysia's palm oil benchmark cost)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is anticipated to recuperate in 2025 after an anticipated drop this year, but costs are expected to remain elevated due to organized growth of the nation's biodiesel mandate, industry analysts said.
The palm oil criteria price in Malaysia has risen more than 35% this year, raised by sluggish output and Indonesia's plan to increase the mandatory domestic biodiesel blend to 40% in January from 35% now in an effort to minimize fuel imports.
Palm oil output next year in top manufacturer Indonesia is expected to by 1.5 million metric tons compared with a projected drop of just 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 firm Oil World, stated he anticipates Indonesia's palm oil production to increase by as much as 2 million loads next year after a 2.5 million lot drop in 2024.
While Indonesia's output is forecast to enhance, supply from somewhere else and of other vegetable oils is seen tightening.
Palm oil output in neighbouring Malaysia is anticipated to dip a little next year after increasing by an approximated 1 million lots in 2024.
"We would need a healing in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are declining," Mielke said.
'FRIGHTENING' PRICE SURGE
The cost surge in palm oil in the past 7 weeks has been "frightening" for buyers, Mielke stated, including 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 lots will be needed for B40 application, deteriorating export supply.
The present palm oil premium has actually already caused palm to lose market share versus other oils, Mielke added.
Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric lot 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 right now is red-hot and extremely bullish, we need to be mindful," stated Dorab Mistry, director at Indian durable goods company Godrej International.
He anticipated the Malaysian cost around 5,000 ringgit and above till June 2025.
Mielke and Mistry prompted Indonesia to
consider postponing
B40 implementation on concern about its influence on food customers.
Meanwhile, Mistry anticipated top palm oil importer India to withdraw its
import duty 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
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Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel
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