Indonesia prepares to implement B40 in January

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

B40 will need extra 3 mln loads feedstock, GAPKI says

Malaysia palm oil standard at highest considering that mid-2022

India may withdraw import tax trek amidst inflation, Mistry states

(Adds expert remarks, updates Malaysia’s palm oil standard price)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia’s palm oil output is anticipated to recover in 2025 after an anticipated drop this year, but rates are anticipated to remain raised due to planned expansion of the country’s biodiesel required, industry experts said.

The palm oil standard cost in Malaysia has risen more than 35% this year, lifted by slow output and Indonesia’s plan to increase the compulsory domestic mix to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in leading producer Indonesia is anticipated to recuperate by 1.5 million metric lots compared with an approximated drop of just 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 study 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 forecast to improve, provide from in other places and of other vegetable oils is seen tightening up.

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

"We would require a healing in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are decreasing,” Mielke said.

'FRIGHTENING’ PRICE SURGE

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

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

The existing palm oil premium has currently triggered 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 load in 2025, McGill of Glenauk estimated.

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

"Sentiment right now is red-hot and very bullish, we need to take care,” said Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry advised Indonesia to

consider delaying

B40 implementation on issue about its influence on food consumers.

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

import duty hike

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