Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia plans to implement B40 in January

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

B40 will need additional 3 mln heaps feedstock, GAPKI says

Malaysia palm oil standard at highest because mid-2022

India may withdraw import tax hike amidst inflation, Mistry says

(Adds analyst 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 prices are anticipated to stay elevated due to planned expansion of the country’s biodiesel mandate, industry analysts stated.

The palm oil standard rate in Malaysia 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 decrease fuel imports.

Palm oil output next year in top producer Indonesia is expected to recover by 1.5 million metric heaps 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 firm Oil World, stated 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 anticipated to improve, supply from somewhere else and of other veggie oils is seen tightening up.

Palm oil output in neighbouring Malaysia is anticipated to dip somewhat next year after increasing by an approximated 1 million lots 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 surge in palm oil in the previous seven weeks has actually been “frightening” for buyers, 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 heaps will be needed for B40 execution, deteriorating export supply.

The current 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 given that mid-2022.

“Sentiment right now is red-hot and extremely bullish, we need to beware,” stated Dorab Mistry, director at Indian consumer items business Godrej International.

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

Mielke and Mistry advised Indonesia to

think about delaying

B40 implementation on concern about its influence on food customers.

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

import duty walking

enforced from September after 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)