Indonesia plans to execute B40 in January
Because case, costs may rally 10%-15% in Jan-March, Mielke says
B40 will need additional 3 mln lots feedstock, GAPKI says
Malaysia palm oil standard at greatest considering that mid-2022
India may withdraw import tax hike amidst inflation, Mistry says
(Adds analyst remarks, updates Malaysia's palm oil benchmark price)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is anticipated to recover in 2025 after an anticipated drop this year, however prices are to stay elevated due to organized growth of the country's biodiesel required, market analysts said.
The palm oil standard price in Malaysia has increased more than 35% this year, lifted by slow output and Indonesia's plan to increase the mandatory domestic biodiesel blend to 40% in January from 35% now in an effort to reduce fuel imports.
Palm oil output next year in top producer Indonesia is anticipated to recover by 1.5 million metric tons compared with an estimated drop of simply over a million loads this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research firm Oil World, stated he expects Indonesia's palm oil production to increase by as much as 2 million heaps next year after a 2.5 million heap drop in 2024.
While Indonesia's output is anticipated to enhance, supply from elsewhere and of other veggie oils is seen tightening up.
Palm oil output in neighbouring Malaysia is anticipated to dip a little next year after increasing by an approximated 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 declining," Mielke stated.
'FRIGHTENING' PRICE SURGE
The rate surge in palm oil in the past seven weeks has actually been "frightening" for purchasers, 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 stated extra feedstock of around 3 million tons will be needed for B40 execution, eroding export supply.
The existing palm oil premium has already caused palm to lose market share against other oils, Mielke included.
Malaysian palm oil costs 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 right now is red-hot and very bullish, we have to beware," stated Dorab Mistry, director at Indian durable goods company Godrej International.
He forecast the Malaysian cost around 5,000 ringgit and above up until June 2025.
Mielke and Mistry advised Indonesia to
consider postponing
B40 execution on concern about its effect on food customers.
Meanwhile, Mistry anticipated top palm oil importer India to withdraw its
import responsibility 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
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Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel
Jason Lees edited this page 2025-01-12 04:15:09 +11:00