Indonesia prepares to implement B40 in January
In that case, prices may rally 10%-15% in Jan-March, Mielke states
B40 will need extra 3 mln loads feedstock, GAPKI states
Malaysia palm oil benchmark at greatest since mid-2022
India may withdraw import tax hike in the middle of inflation, Mistry says
(Adds analyst comments, updates Malaysia's palm oil criteria 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 costs are expected to stay elevated due to planned expansion of the nation's biodiesel required, market experts stated.
The palm oil criteria cost in Malaysia has actually risen more than 35% this year, lifted by slow output and Indonesia's plan to increase the mandatory 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 anticipated to recover by 1.5 million metric tons compared with an estimated drop of just over a million lots this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research firm Oil World, stated he expects Indonesia's palm oil production to increase by as much as 2 million lots next year after a 2.5 million heap drop in 2024.
While Indonesia's output is anticipated to improve, provide from in other places and of other vegetable oils is seen tightening.
Palm oil output in neighbouring Malaysia is anticipated to dip somewhat next year after increasing by an estimated 1 million loads in 2024.
"We would need a recovery in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.
'FRIGHTENING' PRICE SURGE
The cost surge in palm oil in the previous 7 weeks has been "frightening" for buyers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.
The Indonesia Palm Oil Association said additional feedstock of around 3 million heaps will be needed for B40 implementation, wearing down export supply.
The present palm oil premium has actually currently caused palm to lose market share against other oils, Mielke included.
Malaysian palm oil prices 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 given that mid-2022.
"Sentiment today is red-hot and incredibly bullish, we have to take care," said Dorab Mistry, director at Indian durable goods business Godrej International.
He anticipated the Malaysian rate 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 consumers.
Meanwhile, Mistry expected leading palm oil importer India to withdraw its
import duty 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)
