Indonesia prepares to implement B40 in January

Because case, prices may rally 10%-15% in Jan-March, Mielke says

B40 will need extra 3 mln loads feedstock, GAPKI states

Malaysia palm oil standard 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 price)

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, however rates are expected to remain elevated due to planned growth of the country’s biodiesel mandate, market experts stated.

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

Palm oil output next year in leading producer Indonesia is expected to recover by 1.5 million metric loads compared to a projected drop of just over a million loads this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

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

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

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

“We would require a healing in palm in 2025 because combined exports of soya, sunflower and rapeseed oils are declining,” Mielke stated.

‘FRIGHTENING’ PRICE SURGE

The cost rise 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 implements the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million lots will be needed for B40 execution, eroding export supply.

The present palm oil premium has currently to lose market share versus other oils, Mielke included.

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

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

“Sentiment today is red-hot and exceptionally bullish, we need to beware,” stated Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about postponing

B40 execution on issue about its impact on food customers.

Meanwhile, Mistry anticipated 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