Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel

Indonesia prepares to carry out B40 in January

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

B40 will require extra 3 mln loads feedstock, GAPKI says

Malaysia palm oil standard at greatest because mid-2022

India may withdraw import tax trek amid inflation, Mistry says

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

By Bernadette Christina

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

The palm oil benchmark rate in Malaysia has actually risen more than 35% this year, raised by sluggish output and Indonesia’s strategy to increase the compulsory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top producer Indonesia is expected to recover by 1.5 million metric heaps compared to a projected drop of simply over a million heaps this year, Julian McGill, managing 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 heaps next year after a 2.5 million heap drop in 2024.

While Indonesia’s output is forecast to enhance, supply from somewhere else 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 approximated 1 million tons in 2024.

“We would need a healing 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 7 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 needed for B40 implementation, eroding export supply.

The present palm oil premium has currently triggered 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 greatest because mid-2022.

“Sentiment right now is red-hot and incredibly bullish, we have to be mindful,” said Dorab Mistry, director at Indian consumer goods 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 execution on issue about its impact on food customers.

Meanwhile, Mistry expected leading 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; Editing by John Mair, Jane Merriman and Daren Butler)