Indonesia plans to execute B40 in January

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

B40 will require additional 3 mln heaps feedstock, GAPKI states

Malaysia palm oil benchmark at greatest considering that mid-2022

India may withdraw import tax hike in the middle of inflation, Mistry states

(Adds analyst comments, updates Malaysia’s palm oil benchmark 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 costs are anticipated to stay elevated due to scheduled expansion of the country’s biodiesel required, industry analysts stated.

The palm oil standard rate in Malaysia has actually risen more than 35% this year, lifted by sluggish output and Indonesia’s strategy to increase the necessary domestic biodiesel blend to 40% in January from 35% now in an effort to minimize fuel imports.

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

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

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

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

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

‘FRIGHTENING’ PRICE SURGE

The cost rise in in the previous 7 weeks has been “frightening” for purchasers, Mielke stated, 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 heaps will be required for B40 implementation, eroding export supply.

The present palm oil premium has already triggered palm to lose market share against 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 highest because mid-2022.

“Sentiment right now is red-hot and exceptionally bullish, we have to beware,” stated Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry prompted 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 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