Indonesia prepares to execute B40 in January

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

B40 will need additional 3 mln loads feedstock, GAPKI says

Malaysia palm oil criteria at highest because mid-2022

India might withdraw import tax trek amidst inflation, Mistry says

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

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia’s palm oil output is anticipated to recover in 2025 after an expected drop this year, but costs are anticipated to stay elevated due to scheduled expansion of the nation’s biodiesel required, industry analysts stated.

The palm oil benchmark cost in Malaysia has actually increased more than 35% this year, raised by sluggish output and Indonesia’s plan to increase the compulsory domestic biodiesel mix 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 heaps compared with an approximated drop of just 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 company Oil World, said he expects 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 anticipated to enhance, provide from somewhere else and of other veggie oils is seen tightening up.

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

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

‘FRIGHTENING’ PRICE SURGE

The rate surge in palm oil in the past 7 weeks has actually been “frightening” for buyers, Mielke said, 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 loads will be required for B40 execution, wearing down export supply.

The existing palm oil premium has already caused palm to lose market share versus other oils, Mielke included.

Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric lot 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 right now is red-hot and very bullish, we need to take care,” 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 prompted Indonesia to

think about postponing

B40 execution on issue about its influence on food consumers.

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

import task 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