Indonesia prepares to carry out B40 in January
Because case, prices may rally 10%-15% in Jan-March, Mielke says
B40 will require extra 3 mln tons feedstock, GAPKI states
Malaysia palm oil criteria at highest since mid-2022
India might withdraw import tax hike amid inflation, Mistry states
(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 expected drop this year, but rates are expected to stay raised due to planned expansion of the mandate, industry analysts stated.
The palm oil standard cost in Malaysia has actually increased more than 35% this year, lifted by sluggish output and Indonesia's strategy to increase the mandatory domestic biodiesel blend to 40% in January from 35% now in an effort to minimize fuel imports.
Palm oil output next year in leading producer Indonesia is expected to recover by 1.5 million metric lots compared to 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 study firm Oil World, said he expects Indonesia's palm oil production to increase by as much as 2 million heaps 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 slightly next year after increasing by an estimated 1 million tons 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 declining," Mielke stated.
'FRIGHTENING' PRICE SURGE
The price surge in palm oil in the past seven weeks has been "frightening" for buyers, Mielke stated, 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 additional feedstock of around 3 million loads will be required for B40 execution, deteriorating export supply.
The current palm oil premium has already triggered palm to lose market share against other oils, Mielke added.
Malaysian palm oil rates are seen trading at around $950 to $1,050 per metric lot in 2025, McGill of Glenauk estimated.
Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the highest because mid-2022.
"Sentiment right now is red-hot and extremely bullish, we have to take care," said Dorab Mistry, director at Indian durable goods company Godrej International.
He anticipated the Malaysian price around 5,000 ringgit and above up until June 2025.
Mielke and Mistry prompted Indonesia to
consider delaying
B40 implementation on concern about its influence on food consumers.
Meanwhile, Mistry anticipated 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
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Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
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