Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia plans to execute B40 in January

Because case, costs may rally 10%-15% in Jan-March, Mielke states

B40 will require additional 3 mln lots feedstock, GAPKI states

Malaysia palm oil benchmark at highest considering that mid-2022

India might withdraw import tax hike amidst inflation, Mistry says

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

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, however prices are anticipated to remain raised due to organized expansion of the country’s biodiesel mandate, industry experts said.

The palm oil standard rate in Malaysia has risen more than 35% this year, lifted by slow output and Indonesia’s strategy to increase the obligatory domestic biodiesel mix to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in leading manufacturer Indonesia is expected to recuperate by 1.5 million metric heaps compared to an estimated 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 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 lot drop in 2024.

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

Palm oil output in neighbouring Malaysia is expected to dip slightly next year after increasing by an approximated 1 million lots 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 declining,” Mielke said.

‘FRIGHTENING’ PRICE SURGE

The price rise in palm oil in the past seven weeks has been “frightening” for buyers, 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 application, down export supply.

The present 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 load in 2025, McGill of Glenauk estimated.

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

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

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

Mielke and Mistry urged Indonesia to

consider delaying

B40 execution on concern about its impact on food consumers.

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; Editing by John Mair, Jane Merriman and Daren Butler)