Indonesia prepares to execute B40 in January
Because case, costs may rally 10%-15% in Jan-March, Mielke says
B40 will require additional 3 mln heaps feedstock, GAPKI says
Malaysia palm oil standard at greatest given that mid-2022
India may withdraw import tax trek amid inflation, Mistry says
(Adds expert comments, updates Malaysia's palm oil benchmark cost)
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 prices are anticipated to remain raised due to planned growth of the country's biodiesel mandate, market experts said.
The palm oil benchmark rate in Malaysia has risen more than 35% this year, raised by slow output and Indonesia's plan to increase the obligatory 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 recuperate by 1.5 million metric heaps compared with a projected drop of simply over a million loads 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 anticipates Indonesia's palm oil production to increase by as much as 2 million loads next year after a 2.5 million lot drop in 2024.
While Indonesia's output is anticipated to improve, provide from somewhere else and of other vegetable oils is seen tightening up.
Palm oil output in neighbouring Malaysia is expected to dip somewhat next year after increasing by an approximated 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 stated.
'FRIGHTENING' PRICE SURGE
The rate surge in palm oil in the previous 7 weeks has actually been "frightening" for purchasers, Mielke stated, 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 extra feedstock of around 3 million lots will be needed for B40 application, deteriorating export supply.
The present palm oil premium has actually currently caused palm to lose market share versus other oils, Mielke added.
Malaysian palm oil costs 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 since mid-2022.
"Sentiment today is red-hot and exceptionally bullish, we need to be mindful," said Dorab Mistry, director at Indian durable goods company Godrej International.
He forecast the Malaysian price around 5,000 ringgit and above till June 2025.
Mielke and Mistry urged Indonesia to
consider postponing
B40 execution on concern about its effect on food consumers.
Meanwhile, Mistry expected top palm oil importer India to withdraw its
import duty 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)