Indonesia prepares to execute B40 in January

In that case, costs may rally 10%-15% in Jan-March, Mielke states

B40 will require additional 3 mln loads feedstock, GAPKI says

Malaysia palm oil standard at greatest given that mid-2022

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

(Adds analyst remarks, updates Malaysia’s palm oil criteria price)

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 costs are expected to remain raised due to scheduled expansion of the nation’s biodiesel mandate, industry experts stated.

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

Palm oil output next year in top producer Indonesia is expected to recover by 1.5 million metric tons compared with 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 study firm Oil World, said 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 improve, provide from in other places and of other veggie oils is seen tightening.

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

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

‘FRIGHTENING’ PRICE SURGE

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

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

The present palm oil premium has actually currently triggered 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 ton in 2025, McGill of Glenauk approximated.

Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the greatest since mid-2022.

“Sentiment right now is red-hot and incredibly bullish, we need to be cautious,” said Dorab Mistry, at Indian customer products business Godrej International.

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

Mielke and Mistry prompted Indonesia to

consider postponing

B40 execution on issue about its effect on food customers.

Meanwhile, Mistry expected leading 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