Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia prepares to carry out B40 in January

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

B40 will require additional 3 mln heaps feedstock, GAPKI states

Malaysia palm oil standard at greatest because mid-2022

India may withdraw import tax trek in the middle of inflation, Mistry says

(Adds analyst remarks, updates Malaysia’s palm oil criteria price)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is forecast to recover in 2025 after an anticipated drop this year, however prices are expected to stay raised due to planned expansion of the nation’s biodiesel mandate, market experts said.

The palm oil benchmark rate in Malaysia has actually increased more than 35% this year, raised by sluggish 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 manufacturer Indonesia is expected to recuperate by 1.5 million metric tons compared with an approximated drop of simply over a million heaps this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research study 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 heap drop in 2024.

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

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

“We would require a recovery in palm in 2025 because 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 said, adding that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

The Indonesia Palm Oil Association said extra feedstock of around 3 million lots will be needed for B40 implementation, deteriorating export supply.

The existing palm oil premium has currently 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 lot in 2025, McGill of Glenauk estimated.

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

“Sentiment right now is red-hot and very bullish, we need to be cautious,” said Dorab Mistry, director at Indian customer products company Godrej International.

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

Mielke and Mistry urged Indonesia to

consider postponing

B40 execution on concern about its effect on food consumers.

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

import duty hike

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; Editing by John Mair, Jane Merriman and Daren Butler)