Indonesia prepares to carry out B40 in January

Because case, costs might rally 10%-15% in Jan-March, Mielke states

B40 will need extra 3 mln tons feedstock, GAPKI states

Malaysia palm oil benchmark at highest because mid-2022

India might withdraw import tax trek amid inflation, Mistry states

(Adds expert remarks, updates Malaysia’s palm oil standard price)

By Bernadette Christina

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

The palm oil benchmark price in has actually risen more than 35% this year, lifted by slow output and Indonesia’s strategy to increase the compulsory domestic biodiesel blend to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in leading manufacturer Indonesia is anticipated to recover by 1.5 million metric tons compared to an approximated drop of simply over a million loads this year, Julian McGill, handling director at Glenauk Economics, told 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 heaps next year after a 2.5 million load drop in 2024.

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

Palm oil output in neighbouring Malaysia is expected to dip a little next year after increasing by an estimated 1 million tons in 2024.

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

‘FRIGHTENING’ PRICE SURGE

The rate surge in palm oil in the previous seven weeks has actually 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 stated extra feedstock of around 3 million heaps will be required for B40 application, deteriorating export supply.

The present palm oil premium has actually already triggered palm to lose market share against other oils, Mielke included.

Malaysian palm oil prices 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 extremely bullish, we have to take care,” said Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry advised Indonesia to

consider postponing

B40 implementation on issue about its effect on food customers.

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

import responsibility 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