Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia prepares to carry out B40 in January

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

B40 will require additional 3 mln tons feedstock, GAPKI says

Malaysia palm oil benchmark at highest because mid-2022

India may withdraw import tax hike amidst inflation, Mistry states

(Adds analyst comments, updates Malaysia’s palm oil criteria cost)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) – Indonesia’s palm oil output is forecast to recuperate in 2025 after an expected drop this year, however costs are expected to stay elevated due to planned growth of the country’s biodiesel mandate, market experts said.

The palm oil criteria cost in Malaysia has risen more than 35% this year, raised 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 lower fuel imports.

Palm oil output next year in top manufacturer Indonesia is anticipated to recuperate by 1.5 million metric tons compared with a projected drop of just over a million heaps this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research study company Oil World, stated he expects Indonesia’s palm oil production to increase by as much as 2 million loads next year after a 2.5 million load drop in 2024.

While Indonesia’s output is anticipated to improve, provide from elsewhere and of other vegetable oils is seen tightening up.

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

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

‘FRIGHTENING’ PRICE SURGE

The price rise in in the previous 7 weeks has been „frightening” for buyers, Mielke stated, including 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 loads will be needed for B40 execution, eroding export supply.

The current palm oil premium has already caused 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 heap in 2025, McGill of Glenauk estimated.

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

„Sentiment today is red-hot and extremely bullish, we need to take care,” stated Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry advised Indonesia to

think about delaying

B40 execution on concern about its effect on food customers.

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

import duty walking

imposed 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)