Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia plans to carry out B40 in January

In that case, rates may rally 10%-15% in Jan-March, Mielke states

B40 will require additional 3 mln loads feedstock, GAPKI says

Malaysia palm oil standard at greatest given that mid-2022

India might withdraw import tax trek amidst inflation, Mistry says

(Adds expert remarks, updates Malaysia’s palm oil standard 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 expected to remain raised due to scheduled expansion of the nation’s biodiesel required, market analysts stated.

The palm oil benchmark price in Malaysia has increased more than 35% this year, raised by slow output and Indonesia’s plan to increase the necessary domestic biodiesel blend to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in leading producer Indonesia is anticipated to recuperate by 1.5 million metric lots compared to a projected drop of simply over a million lots this year, Julian McGill, handling director at Glenauk Economics, informed 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 loads next year after a 2.5 million ton drop in 2024.

While Indonesia’s output is forecast 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 heaps in 2024.

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

‘FRIGHTENING’ PRICE SURGE

The cost rise in palm oil in the previous seven weeks has actually been “frightening” for purchasers, 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 said extra feedstock of around 3 million heaps will be needed for B40 implementation, wearing down export supply.

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

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

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

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

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

Mielke and Mistry urged Indonesia to

consider postponing

B40 implementation on concern about its influence on food consumers.

Meanwhile, Mistry expected leading palm oil importer India to withdraw its

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