Indonesia prepares to execute B40 in January

In that case, costs might rally 10%-15% in Jan-March, Mielke says

B40 will require extra 3 mln heaps feedstock, GAPKI states

Malaysia palm oil criteria at highest since mid-2022

India might withdraw import tax trek amid inflation, Mistry says

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

By Bernadette Christina

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

The palm oil criteria rate in Malaysia has increased more than 35% this year, lifted by slow output and to increase the compulsory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric loads compared to an approximated drop of just over a million lots this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research study company Oil World, said he anticipates Indonesia’s palm oil production to increase by as much as 2 million heaps next year after a 2.5 million lot drop in 2024.

While Indonesia’s output is anticipated to improve, supply from elsewhere and of other vegetable oils is seen tightening up.

Palm oil output in neighbouring Malaysia is expected to dip slightly next year after increasing by an approximated 1 million loads in 2024.

“We would need a recovery in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing,” Mielke said.

‘FRIGHTENING’ PRICE SURGE

The price rise in palm oil in the past 7 weeks has actually been “frightening” for purchasers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million loads will be required for B40 application, eroding export supply.

The existing palm oil premium has currently caused palm to lose market share against other oils, Mielke included.

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric heap in 2025, McGill of Glenauk approximated.

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

“Sentiment today is red-hot and extremely bullish, we need to beware,” stated Dorab Mistry, director at Indian customer products business Godrej International.

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

Mielke and Mistry advised Indonesia to

think about delaying

B40 execution on concern about its impact on food consumers.

Meanwhile, Mistry expected 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