Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
Indonesia prepares to carry out B40 in January
In that case, costs may rally 10%-15% in Jan-March, Mielke says
B40 will need extra 3 mln tons feedstock, GAPKI states
Malaysia palm oil benchmark at highest because mid-2022
India might withdraw import tax trek amid inflation, Mistry states
(Adds analyst remarks, updates Malaysia's palm oil benchmark rate)
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 remain elevated due to scheduled expansion of the country's biodiesel mandate, market analysts said.
The palm oil standard cost in Malaysia has actually increased more than 35% this year, lifted by sluggish output and Indonesia's strategy to increase the obligatory domestic biodiesel mix to 40% in January from 35% now in an effort to reduce fuel imports.
Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric loads compared with a projected drop of just over a million loads this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research firm Oil World, said he expects oil production to increase by as much as 2 million lots next year after a 2.5 million heap drop in 2024.
While Indonesia's output is forecast to improve, provide from somewhere else and of other vegetable oils is seen tightening up.
Palm oil output in neighbouring Malaysia is expected to dip somewhat next year after increasing by an approximated 1 million tons in 2024.
"We would require a healing in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining," Mielke stated.
'FRIGHTENING' PRICE SURGE
The cost rise in palm oil in the past seven 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 lots will be required for B40 implementation, wearing down export supply.
The present palm oil premium has currently caused palm to lose market share versus other oils, Mielke added.
Malaysian palm oil rates 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 highest since mid-2022.
"Sentiment right now is red-hot and exceptionally bullish, we need to be mindful," said Dorab Mistry, director at Indian durable goods business Godrej International.
He anticipated the Malaysian price around 5,000 ringgit and above until June 2025.
Mielke and Mistry advised Indonesia to
consider delaying
B40 application on issue about its effect on food consumers.
Meanwhile, Mistry expected top palm oil importer India to withdraw its
import responsibility walking
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; Editing by John Mair, Jane Merriman and Daren Butler)