Indonesia Palm Oil Output Seen Recovering In 2025 But Biodiesel
Indonesia plans to carry out B40 in January
In that case, prices may rally 10%-15% in Jan-March, Mielke says
B40 will need additional 3 mln loads feedstock, GAPKI states
Malaysia palm oil standard at highest given that mid-2022
India may withdraw import tax hike amid inflation, Mistry says
(Adds analyst remarks, 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 expected drop this year, however prices are anticipated to stay elevated due to scheduled expansion of the country's biodiesel required, market analysts stated.
The palm oil benchmark price in Malaysia has actually increased more than 35% this year, raised by sluggish output and Indonesia's strategy to increase the obligatory domestic biodiesel mix to 40% in January from 35% now in an effort to reduce fuel imports.
Palm oil output next year in top manufacturer Indonesia is anticipated to recover by 1.5 million metric heaps compared with an estimated drop of simply over a million lots this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research World, said he expects Indonesia's palm oil production to increase by as much as 2 million lots next year after a 2.5 million lot drop in 2024.
While Indonesia's output is anticipated to improve, provide from elsewhere 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 estimated 1 million heaps in 2024.
"We would need a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining," Mielke stated.
'FRIGHTENING' PRICE SURGE
The price rise in palm oil in the past 7 weeks has been "frightening" for buyers, Mielke stated, adding 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 lots will be required for B40 application, eroding export supply.
The present palm oil premium has actually already caused palm to lose market share versus 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 highest since mid-2022.
"Sentiment today is red-hot and incredibly bullish, we have to beware," said Dorab Mistry, director at Indian consumer items business Godrej International.
He forecast the Malaysian rate around 5,000 ringgit and above until June 2025.
Mielke and Mistry advised Indonesia to
consider delaying
B40 execution on concern about its influence on food consumers.
Meanwhile, Mistry expected leading palm oil importer India to withdraw its
import task walking
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)
