Indonesia prepares to execute B40 in January

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

B40 will require additional 3 mln tons feedstock, GAPKI states

Malaysia palm oil benchmark at highest given that mid-2022

India may withdraw import tax hike amid inflation, Mistry says

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

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia’s palm oil output is forecast to recover in 2025 after an anticipated drop this year, but prices are anticipated to remain raised due to planned growth of the nation’s biodiesel required, industry experts said.

The palm oil standard price in Malaysia has increased more than 35% this year, raised 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 leading producer Indonesia is expected to recover by 1.5 million metric loads compared with a projected 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 firm 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 heap drop in 2024.

While output is anticipated to enhance, supply from in other places and of other vegetable oils is seen tightening.

Palm oil output in neighbouring Malaysia is anticipated to dip slightly next year after increasing by an estimated 1 million loads in 2024.

“We would require a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining,” Mielke stated.

‘FRIGHTENING’ PRICE SURGE

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

The Indonesia Palm Oil Association said extra feedstock of around 3 million loads will be required for B40 implementation, wearing down export supply.

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

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 greatest given that mid-2022.

“Sentiment right now is red-hot and extremely bullish, we have to be mindful,” stated Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry urged Indonesia to

consider delaying

B40 implementation on concern about its effect on food customers.

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

import responsibility 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