Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia plans to implement B40 in January

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

B40 will need additional 3 mln tons feedstock, GAPKI states

Malaysia palm oil criteria at highest since mid-2022

India might withdraw import tax hike amidst inflation, Mistry states

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

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 prices are expected to stay elevated due to scheduled expansion of the country’s biodiesel mandate, industry analysts stated.

The palm oil benchmark cost in Malaysia has risen more than 35% this year, lifted by sluggish output and Indonesia’s strategy to increase the mandatory domestic mix to 40% in January from 35% now in an effort to lower fuel imports.

Palm oil output next year in leading manufacturer Indonesia is anticipated to recuperate by 1.5 million metric heaps compared to a projected drop of simply over a million lots 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 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 enhance, supply from somewhere else and of other veggie oils is seen tightening up.

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

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

‘FRIGHTENING’ PRICE SURGE

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

The Indonesia Palm Oil Association stated extra feedstock of around 3 million loads will be needed for B40 application, eroding export supply.

The current palm oil premium has actually already caused palm to lose market share versus other oils, Mielke included.

Malaysian palm oil costs 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 because mid-2022.

“Sentiment right now is red-hot and exceptionally bullish, we need to be cautious,” said Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry advised Indonesia to

think about postponing

B40 application on concern about its influence on food consumers.

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

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