Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
Indonesia plans to execute B40 in January
Because case, prices may rally 10%-15% in Jan-March, Mielke states
B40 will need additional 3 mln tons feedstock, GAPKI states
Malaysia palm oil benchmark at greatest considering that mid-2022
India might withdraw import tax trek in the middle of inflation, Mistry states
(Adds analyst remarks, updates Malaysia's palm oil criteria 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, however rates are anticipated to stay raised due to scheduled expansion of the nation's biodiesel required, market experts said.
The palm oil criteria rate in Malaysia has increased more than 35% this year, lifted by slow output and Indonesia's plan to increase the mandatory domestic biodiesel mix to 40% in January from 35% now in an effort to decrease fuel imports.
Palm oil output next year in top manufacturer Indonesia is expected to recover by 1.5 million metric heaps compared with a projected drop of just over a million loads this year, Julian McGill, handling director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.
Thomas Mielke, head of Hamburg-based research company Oil World, stated he anticipates Indonesia's palm oil production to increase by as much as 2 million tons next year after a 2.5 million ton drop in 2024.
While Indonesia's output is forecast to improve, supply from elsewhere and of other veggie oils is seen tightening up.
Palm oil output in neighbouring Malaysia is expected to dip slightly next year after increasing by an approximated 1 million heaps 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 said.
'FRIGHTENING' PRICE SURGE
The price surge in palm oil in the previous seven weeks has been "frightening" for buyers, Mielke said, that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.
The Indonesia Palm Oil Association stated extra feedstock of around 3 million tons will be required for B40 application, eroding export supply.
The current palm oil premium has actually already triggered 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 heap 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 very bullish, we have to beware," said Dorab Mistry, director at Indian durable goods business Godrej International.
He anticipated the Malaysian price around 5,000 ringgit and above until June 2025.
Mielke and Mistry urged Indonesia to
consider delaying
B40 implementation on concern about its effect on food consumers.
Meanwhile, Mistry expected leading palm oil importer India to withdraw its
import responsibility 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; Editing by John Mair, Jane Merriman and Daren Butler)