Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia prepares to carry out B40 in January

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

B40 will require additional 3 mln heaps feedstock, GAPKI says

Malaysia palm oil criteria at greatest since mid-2022

India may withdraw import tax trek amid inflation, Mistry states

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

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is anticipated to recuperate in 2025 after an anticipated drop this year, but costs are expected to remain elevated due to scheduled growth of the nation’s biodiesel required, industry experts stated.

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

Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric lots compared with an estimated drop of just over a million tons 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 anticipates Indonesia’s palm oil production to increase by as much as 2 million loads next year after a 2.5 million lot drop in 2024.

While Indonesia’s output is forecast to improve, provide from elsewhere 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 estimated 1 million heaps in 2024.

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

PRICE SURGE

The price rise in palm oil in the previous 7 weeks has 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 extra feedstock of around 3 million tons will be required for B40 implementation, deteriorating export supply.

The existing palm oil premium has actually currently caused palm to lose market share against other oils, Mielke added.

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric heap in 2025, McGill of Glenauk estimated.

Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the greatest considering that mid-2022.

“Sentiment right now is red-hot and exceptionally bullish, we have to take care,” said Dorab Mistry, director at Indian consumer items business Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about postponing

B40 implementation on concern about its effect on food customers.

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

import task 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; Editing by John Mair, Jane Merriman and Daren Butler)