GitLab

to carry out B40 in January

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

B40 will require additional 3 mln loads feedstock, GAPKI states

Malaysia palm oil standard at greatest because mid-2022

India may withdraw import tax trek amidst inflation, Mistry states

(Adds analyst remarks, updates Malaysia's palm oil standard cost)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recover in 2025 after an expected drop this year, however costs are expected to stay raised due to planned growth of the country's biodiesel mandate, market 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 compulsory domestic biodiesel mix to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in leading producer Indonesia is expected to recuperate by 1.5 million metric heaps compared to an approximated 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 company Oil World, said 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 forecast to improve, supply from elsewhere and of other vegetable oils is seen tightening.

Palm oil output in neighbouring Malaysia is anticipated to dip somewhat next year after increasing by an estimated 1 million tons in 2024.

"We would need a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining," Mielke said.

'FRIGHTENING' PRICE SURGE

The price rise in palm oil in the previous 7 weeks has actually been "frightening" for purchasers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million lots will be needed for B40 application, wearing down export supply.

The current palm oil premium has currently caused palm to lose market share against 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 approximated.

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

"Sentiment right now is red-hot and incredibly bullish, we need to take care," stated Dorab Mistry, director at Indian consumer items company Godrej International.

He anticipated the Malaysian rate around 5,000 ringgit and above until June 2025.

Mielke and Mistry advised Indonesia to

think about delaying

B40 application on concern about its effect on food consumers.

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)