Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia plans to implement B40 in January

Because case, costs might rally 10%-15% in Jan-March, Mielke says

B40 will need additional 3 mln lots feedstock, GAPKI says

Malaysia palm oil standard at highest given that mid-2022

India may withdraw import tax trek amid inflation, Mistry says

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

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is anticipated to recover in 2025 after an expected drop this year, however rates are expected to remain raised due to scheduled growth of the nation’s biodiesel mandate, market experts stated.

The palm oil criteria price in Malaysia has increased more than 35% this year, raised by sluggish output and Indonesia’s strategy to increase the necessary domestic biodiesel mix to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in leading manufacturer Indonesia is anticipated to recover by 1.5 million metric loads compared to an approximated drop of simply 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 expects 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 enhance, supply from elsewhere and of other veggie oils is seen tightening up.

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

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

‘FRIGHTENING’ PRICE SURGE

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

The Indonesia Palm Oil Association said additional feedstock of around 3 million lots will be needed for B40 execution, 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 prices 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 given that mid-2022.

“Sentiment today is red-hot and extremely bullish, we need to take care,” said Dorab Mistry, director at Indian consumer items company Godrej International.

He anticipated the Malaysian price around 5,000 ringgit and above till June 2025.

Mielke and Mistry prompted Indonesia to

consider postponing

B40 implementation on issue about its influence on .

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

import task 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; Editing by John Mair, Jane Merriman and Daren Butler)