Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia plans to implement B40 in January

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

B40 will need additional 3 mln tons feedstock, GAPKI states

Malaysia palm oil criteria at highest given that mid-2022

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

(Adds expert comments, updates Malaysia’s palm oil criteria rate)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is forecast to recuperate in 2025 after an expected drop this year, but prices are expected to remain elevated due to organized growth of the country’s biodiesel mandate, market experts said.

The palm oil criteria 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 mix to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in top manufacturer Indonesia is expected to recover by 1.5 million metric tons with an estimated drop of simply over a million heaps this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research firm 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 lot drop in 2024.

While Indonesia’s output is forecast to enhance, provide from somewhere else and of other vegetable 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 heaps 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 price rise in palm oil in the past seven weeks has been “frightening” for buyers, Mielke said, adding 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 lots will be needed for B40 execution, wearing down export supply.

The existing palm oil premium has actually already triggered palm to lose market share against other oils, Mielke included.

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

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

“Sentiment right now is red-hot and very bullish, we need to take care,” stated Dorab Mistry, director at Indian consumer items company Godrej International.

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

Mielke and Mistry advised Indonesia to

consider postponing

B40 implementation on issue about its influence on food consumers.

Meanwhile, Mistry anticipated top palm oil importer India to withdraw its

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