Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia plans to execute B40 in January

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

B40 will require extra 3 mln lots feedstock, GAPKI says

Malaysia palm oil criteria at greatest given that mid-2022

India might withdraw import tax hike amidst inflation, Mistry states

(Adds expert comments, updates Malaysia’s 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 anticipated to remain elevated due to scheduled expansion of the nation’s biodiesel mandate, market experts stated.

The palm oil benchmark rate in Malaysia has increased more than 35% this year, raised by slow output and Indonesia’s plan to increase the necessary domestic biodiesel mix to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in leading manufacturer Indonesia is expected to recover by 1.5 million metric tons compared to 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 study 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 ton drop in 2024.

While Indonesia’s output is anticipated to improve, supply from somewhere else and of other vegetable oils is seen tightening up.

Palm oil output in neighbouring Malaysia is expected to dip somewhat next year after increasing by an approximated 1 million heaps in 2024.

“We would require a recovery in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing,” Mielke stated.

‘FRIGHTENING’ PRICE SURGE

The price rise in palm oil in the previous 7 weeks has actually been “frightening” for purchasers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million loads will be needed for B40 implementation, wearing down export supply.

The existing palm oil premium has currently caused palm to lose market share versus 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 highest since mid-2022.

“Sentiment today is red-hot and very bullish, we need to be cautious,” stated Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry prompted Indonesia to

consider delaying

B40 implementation on issue about its effect on food customers.

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

import responsibility 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)