Indonesia plans to implement B40 in January

In that case, costs may rally 10%-15% in Jan-March, Mielke states

B40 will require additional 3 mln tons feedstock, GAPKI states

Malaysia palm oil standard at highest considering that mid-2022

India might withdraw import tax hike amid inflation, Mistry states

(Adds expert comments, updates Malaysia’s palm oil standard cost)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia’s palm oil output is anticipated to recover in 2025 after an expected drop this year, but prices are expected to remain raised due to scheduled growth of the nation’s biodiesel mandate, market experts stated.

The palm oil benchmark cost in Malaysia has actually increased more than 35% this year, raised by sluggish output and Indonesia’s strategy to increase the compulsory domestic biodiesel blend to 40% in January from 35% now in an effort to lower fuel imports.

Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric heaps compared with an approximated drop of just over a million loads this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil 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 lots next year after a 2.5 million lot drop in 2024.

While Indonesia’s output is forecast to enhance, provide from elsewhere and of other veggie oils is seen tightening.

Palm oil output in neighbouring Malaysia is anticipated to dip a little next year after increasing by an approximated 1 million loads in 2024.

“We would need a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are decreasing,” Mielke stated.

‘FRIGHTENING’ PRICE SURGE

The rate rise in palm oil in the past 7 weeks has been “frightening” for buyers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million lots will be needed for B40 application, eroding export supply.

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

Malaysian palm oil prices 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 since mid-2022.

“Sentiment today is red-hot and exceptionally bullish, we have to beware,” said Dorab Mistry, director at Indian durable goods company Godrej International.

He forecast the Malaysian rate around 5,000 ringgit and above up until June 2025.

Mielke and Mistry advised Indonesia to

think about postponing

B40 application on concern about its effect on food consumers.

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

import responsibility hike

enforced from September after elections in the state of Maharashtra in November. ($1 = 4.3800 ringgit) (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy