Indonesia plans to implement B40 in January

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

B40 will require additional 3 mln loads feedstock, GAPKI states

Malaysia palm oil criteria at greatest because mid-2022

India might withdraw import tax hike amid inflation, Mistry states

(Adds expert remarks, updates Malaysia’s palm oil standard cost)

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 prices are expected to remain raised due to organized expansion of the country’s biodiesel mandate, market analysts said.

The palm oil standard cost in Malaysia has increased more than 35% this year, raised by slow output and Indonesia’s strategy to increase the mandatory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top producer Indonesia is expected to recuperate by 1.5 million metric tons compared to a projected drop of simply over a million tons 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 expects Indonesia’s palm oil production to increase by as much as 2 million lots next year after a 2.5 million ton drop in 2024.

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

Palm oil output in neighbouring Malaysia is anticipated to dip slightly next year after increasing by an approximated 1 million lots 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 rate rise in palm oil in the past 7 weeks has been “frightening” for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million tons will be required for B40 implementation, eroding export supply.

The present palm oil premium has actually already triggered palm to lose market share versus 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 considering that mid-2022.

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

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

Mielke and Mistry advised Indonesia to

consider postponing

B40 on concern about its effect on food customers.

Meanwhile, Mistry anticipated 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