Indonesia plans to implement B40 in January

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

B40 will need additional 3 mln tons feedstock, GAPKI says

Malaysia palm oil standard at greatest given that mid-2022

India might withdraw import tax hike amidst inflation, Mistry says

(Adds expert comments, updates Malaysia’s palm oil benchmark cost)

By Bernadette Christina

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

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

Palm oil output next year in leading manufacturer Indonesia is expected to recover by 1.5 million metric tons compared with an estimated drop of just over a million lots this year, Julian McGill, managing 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 tons next year after a 2.5 million ton drop in 2024.

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

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

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

‘FRIGHTENING’ PRICE SURGE

The rate surge in palm oil in the past seven weeks has actually 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 stated additional feedstock of around 3 million heaps will be required for B40 application, deteriorating 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 heap in 2025, McGill of Glenauk estimated.

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 exceptionally bullish, we need to beware,” stated Dorab Mistry, director at Indian customer goods company Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about postponing

B40 implementation on concern about its effect on food customers.

Meanwhile, Mistry anticipated top palm oil importer India to withdraw its

import responsibility 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