Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
Indonesia prepares to implement B40 in January
In that case, rates might rally 10%-15% in Jan-March, Mielke states
B40 will need additional 3 mln tons feedstock, GAPKI says
Malaysia palm oil criteria at greatest because mid-2022
India might withdraw import tax hike amidst inflation, Mistry says
(Adds analyst remarks, palm oil criteria price)
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, however costs are expected to stay raised due to organized expansion of the country's biodiesel mandate, market experts said.
The palm oil benchmark cost in Malaysia has risen more than 35% this year, lifted by sluggish output and Indonesia's plan 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 leading manufacturer Indonesia is expected to recover by 1.5 million metric heaps compared with an estimated drop of just over a million lots this year, Julian McGill, handling director at Glenauk Economics, informed 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 tons next year after a 2.5 million load drop in 2024.
While Indonesia's output is forecast to enhance, supply from in other places and of other vegetable oils is seen tightening.
Palm oil output in neighbouring Malaysia is expected to dip a little next year after increasing by an estimated 1 million heaps 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 cost surge in palm oil in the past 7 weeks has actually been "frightening" for purchasers, Mielke stated, adding 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 tons will be needed for B40 execution, wearing down export supply.
The existing palm oil premium has currently triggered palm to lose market share against 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 greatest because mid-2022.
"Sentiment right now is red-hot and extremely bullish, we need to be careful," stated Dorab Mistry, director at Indian durable goods company Godrej International.
He forecast the Malaysian cost around 5,000 ringgit and above until June 2025.
Mielke and Mistry prompted Indonesia to
think about postponing
B40 implementation on issue about its impact on food customers.
Meanwhile, Mistry anticipated leading palm oil importer India to withdraw its
import task 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)