Indonesia plans to execute B40 in January

Because case, prices might rally 10%-15% in Jan-March, Mielke states

B40 will require additional 3 mln lots feedstock, GAPKI states

Malaysia palm oil benchmark at greatest considering that mid-2022

India may withdraw import tax hike in the middle of 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 forecast to recover in 2025 after an expected drop this year, however costs are expected to remain raised due to planned expansion of the country’s biodiesel mandate, market analysts stated.

The palm oil benchmark price in Malaysia has risen more than 35% this year, raised by slow output and Indonesia’s strategy to increase the compulsory domestic biodiesel mix to 40% in January from 35% now in an effort to lower fuel imports.

Palm oil output next year in top manufacturer Indonesia is anticipated to recuperate by 1.5 million metric loads compared to an approximated drop of just over a million loads 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, said he expects Indonesia’s palm oil production to increase by as much as 2 million tons next year after a 2.5 million lot drop in 2024.

While Indonesia’s output is forecast to enhance, provide from elsewhere and of other vegetable oils is seen tightening up.

Palm oil output in neighbouring Malaysia is expected to dip somewhat next year after increasing by an estimated 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 stated.

‘FRIGHTENING’ PRICE SURGE

The rate rise 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 B40 policy.

The Indonesia Palm Oil Association stated extra feedstock of around 3 million tons will be needed for B40 application, eroding export supply.

The current 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 ton 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 today is red-hot and exceptionally bullish, we need 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

think about postponing

B40 execution on issue about its effect on food customers.

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