Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia plans to carry out B40 in January

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

B40 will need extra 3 mln tons feedstock, GAPKI states

Malaysia palm oil criteria at highest considering that mid-2022

India may withdraw import tax trek amid 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 forecast to recover in 2025 after an expected drop this year, however prices are expected to stay elevated due to planned growth of the country’s biodiesel mandate, market analysts stated.

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

Palm oil output next year in top manufacturer Indonesia is expected to recuperate by 1.5 million metric loads compared to a projected drop of simply over a million lots 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, stated he expects Indonesia’s palm oil production to increase by as much as 2 million heaps next year after a 2.5 million load drop in 2024.

While Indonesia’s output is forecast to improve, provide from elsewhere 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 lots in 2024.

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

‘FRIGHTENING’ PRICE SURGE

The cost rise in palm oil in the past seven weeks has been “frightening” for purchasers, Mielke stated, including that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million loads will be required for B40 application, deteriorating export supply.

The current palm oil premium has currently caused palm to lose market share against other oils, Mielke added.

Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric ton 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 today is red-hot and very bullish, we have to beware,” stated Dorab Mistry, director at Indian consumer products company Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about postponing

B40 application on issue about its effect on food consumers.

Meanwhile, Mistry anticipated leading 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; Editing by John Mair, Jane Merriman and Daren Butler)