Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia plans to execute B40 in January

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

B40 will need additional 3 mln heaps feedstock, GAPKI states

Malaysia palm oil benchmark at highest because mid-2022

India might withdraw import tax trek amidst inflation, Mistry says

(Adds expert comments, updates Malaysia’s palm oil criteria price)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is forecast to recover in 2025 after an anticipated drop this year, however prices are expected to stay elevated due to scheduled growth of the country’s biodiesel required, industry experts stated.

The palm oil criteria cost in Malaysia has increased more than 35% this year, lifted by slow output and Indonesia’s strategy to increase the compulsory domestic biodiesel blend 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 to a projected drop of simply over a million heaps 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 expects Indonesia’s palm oil production to increase by as much as 2 million tons next year after a 2.5 million load drop in 2024.

While Indonesia’s output is anticipated to enhance, supply from somewhere else and of other veggie oils is seen tightening.

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

“We would require a recovery 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 rate surge in palm oil in the previous 7 weeks has actually been “frightening” for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million loads will be required for B40 implementation, 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 rates 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 incredibly bullish, we have to take care,” stated Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry advised Indonesia to

consider postponing

B40 implementation on issue about its effect on food customers.

Meanwhile, Mistry anticipated leading palm India to withdraw its

import responsibility 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)