Indonesia Palm Oil Output Seen Recovering in 2025, but Biodiesel

Indonesia plans to implement B40 in January

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

B40 will need extra 3 mln tons feedstock, GAPKI states

Malaysia palm oil criteria at highest because mid-2022

India may withdraw import tax trek in the middle of inflation, Mistry says

(Adds analyst 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 recuperate in 2025 after an expected drop this year, but prices are expected to remain elevated due to planned growth of the nation’s biodiesel required, industry analysts said.

The palm oil benchmark price in Malaysia has risen more than 35% this year, raised by slow output and Indonesia’s strategy to increase the necessary 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 anticipated to recuperate by 1.5 million metric heaps compared to a projected drop of just over a million lots 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, said he expects Indonesia’s palm oil production to increase by as much as 2 million lots next year after a 2.5 million lot drop in 2024.

While Indonesia’s output is anticipated to enhance, supply from somewhere else and of other vegetable oils is seen tightening.

Palm oil output in neighbouring Malaysia is expected to dip slightly next year after increasing by an approximated 1 million lots in 2024.

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

‘FRIGHTENING’ PRICE SURGE

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

The Indonesia Palm Oil Association said feedstock of around 3 million heaps will be required for B40 application, wearing down export supply.

The current palm oil premium has already triggered palm to lose market share against other oils, Mielke added.

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric load 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 right now is red-hot and exceptionally bullish, we need to take care,” said Dorab Mistry, director at Indian consumer goods business Godrej International.

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

Mielke and Mistry urged Indonesia to

think about postponing

B40 implementation on issue about its effect on food customers.

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

import task 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)