Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia plans to execute B40 in January

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

B40 will need additional 3 feedstock, GAPKI states

Malaysia palm oil benchmark at greatest since mid-2022

India may withdraw import tax trek amidst inflation, Mistry says

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

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 rates are expected to stay raised due to planned expansion of the nation’s biodiesel required, 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 plan to increase the compulsory domestic biodiesel mix to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in leading producer Indonesia is anticipated to recuperate by 1.5 million metric loads compared to an estimated drop of just 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 company Oil World, stated he anticipates Indonesia’s palm oil production to increase by as much as 2 million loads next year after a 2.5 million ton drop in 2024.

While Indonesia’s output is anticipated to improve, provide from in other places 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 tons in 2024.

“We would require a recovery 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 been “frightening” for purchasers, Mielke said, adding that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million tons will be required for B40 execution, eroding export supply.

The present palm oil premium has actually currently caused palm to lose market share versus other oils, Mielke included.

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric load in 2025, McGill of Glenauk estimated.

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 exceptionally bullish, we have to be cautious,” said Dorab Mistry, director at Indian customer items company Godrej International.

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

Mielke and Mistry prompted 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 duty 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)