Indonesia plans to execute B40 in January

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

B40 will require extra 3 mln lots feedstock, GAPKI states

Malaysia palm oil standard at greatest given that mid-2022

India might withdraw import tax trek amidst 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 forecast to recuperate in 2025 after an anticipated drop this year, but costs are expected to stay raised due to scheduled growth of the country’s biodiesel mandate, industry experts stated.

The palm oil benchmark cost in has actually risen more than 35% this year, raised by sluggish output and Indonesia’s plan 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 lots compared with an approximated drop of just over a million heaps this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research firm Oil World, said he expects Indonesia’s palm oil production to increase by as much as 2 million heaps next year after a 2.5 million heap drop in 2024.

While Indonesia’s output is forecast to enhance, supply from in other places and of other veggie oils is seen tightening.

Palm oil output in neighbouring Malaysia is expected to dip slightly next year after increasing by an approximated 1 million heaps 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 declining,” Mielke said.

‘FRIGHTENING’ PRICE SURGE

The price surge in palm oil in the past seven weeks has actually been “frightening” for buyers, 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 stated additional feedstock of around 3 million tons will be needed for B40 application, deteriorating export supply.

The present palm oil premium has already caused palm to lose market share versus other oils, Mielke added.

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

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

Mielke and Mistry advised Indonesia to

think about postponing

B40 application on issue about its effect on food customers.

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