Indonesia plans to execute B40 in January

Because case, prices might rally 10%-15% in Jan-March, Mielke states

B40 will need additional 3 mln lots feedstock, GAPKI says

Malaysia palm oil criteria at greatest considering that mid-2022

India might withdraw import tax hike in the middle of inflation, Mistry states

(Adds analyst comments, updates Malaysia’s palm oil standard rate)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia’s palm oil output is anticipated to recuperate in 2025 after an expected drop this year, however costs are anticipated to stay raised due to scheduled expansion of the country’s biodiesel required, market analysts said.

The palm oil benchmark price in Malaysia has actually more than 35% this year, raised by slow output and Indonesia’s strategy to increase the mandatory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top manufacturer Indonesia is anticipated to recuperate by 1.5 million metric heaps compared to a projected 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 company Oil World, said he expects 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 anticipated to enhance, supply from elsewhere and of other veggie oils is seen tightening up.

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

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

‘FRIGHTENING’ PRICE SURGE

The cost rise in palm oil in the past 7 weeks has been “frightening” for purchasers, 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 lots will be required for B40 application, deteriorating export supply.

The existing palm oil premium has already triggered palm to lose market share against other oils, Mielke added.

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

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 incredibly bullish, we have to beware,” said Dorab Mistry, director at Indian consumer goods business Godrej International.

He forecast the Malaysian price around 5,000 ringgit and above until June 2025.

Mielke and Mistry advised Indonesia to

consider delaying

B40 application on concern about its influence on food consumers.

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

import task walking

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