Indonesia plans to execute B40 in January

In that case, prices might rally 10%-15% in Jan-March, Mielke says

B40 will need additional 3 mln lots feedstock, GAPKI states

Malaysia palm oil benchmark at highest because mid-2022

India may withdraw import tax hike amid inflation, Mistry states

(Adds analyst remarks, updates Malaysia’s palm oil benchmark rate)

By 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 prices are expected to stay elevated due to organized expansion of the nation’s biodiesel mandate, market analysts said.

The palm oil standard rate in Malaysia has increased more than 35% this year, lifted by slow output and Indonesia’s plan to increase the mandatory domestic biodiesel blend 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 recover by 1.5 million metric heaps compared to an estimated drop of simply over a million heaps 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, stated he expects Indonesia’s palm oil production to increase by as much as 2 million tons next year after a 2.5 million ton drop in 2024.

While Indonesia’s output is anticipated to improve, supply from elsewhere 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 approximated 1 million tons in 2024.

"We would require a recovery in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are declining,” Mielke said.

'FRIGHTENING’ PRICE SURGE

The rate rise in palm oil in the past 7 weeks has actually been “frightening” for buyers, Mielke stated, 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 extra feedstock of around 3 million heaps will be needed for B40 application, deteriorating export supply.

The current palm oil premium has actually currently triggered palm to lose market share versus other oils, Mielke included.

Malaysian palm oil rates 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 today is red-hot and very bullish, we have to take care,” said Dorab Mistry, director at Indian consumer items business Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about delaying

B40 execution on issue about its effect on food customers.

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

import task walking

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