Indonesia plans to implement B40 in January
Because case, rates may rally 10%-15% in Jan-March, Mielke says
B40 will need additional 3 mln heaps feedstock, GAPKI states
Malaysia palm oil benchmark at highest given that mid-2022
India may withdraw import tax hike amid 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 recover in 2025 after an expected drop this year, however prices are expected to stay elevated due to scheduled growth of the country's biodiesel mandate, said.
The palm oil benchmark rate in Malaysia 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 reduce fuel imports.
Palm oil output next year in leading producer Indonesia is expected to recover by 1.5 million metric loads compared to an estimated drop of just over a million tons this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research study company Oil World, stated he anticipates Indonesia's palm oil production to increase by as much as 2 million tons next year after a 2.5 million heap drop in 2024.
While Indonesia's output is anticipated to enhance, provide from elsewhere 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 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 declining," Mielke stated.
'FRIGHTENING' PRICE SURGE
The price surge in palm oil in the past 7 weeks has actually been "frightening" for buyers, Mielke said, adding 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 needed for B40 execution, eroding export supply.
The current palm oil premium has already 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 ton in 2025, McGill of Glenauk estimated.
Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the highest considering that mid-2022.
"Sentiment right now is red-hot and exceptionally bullish, we need to take care," stated Dorab Mistry, director at Indian durable goods company Godrej International.
He anticipated the Malaysian rate around 5,000 ringgit and above till June 2025.
Mielke and Mistry urged Indonesia to
consider postponing
B40 execution on concern about its effect on food consumers.
Meanwhile, Mistry anticipated leading 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
1
Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
Joesph Cottman edited this page 1 week ago