Indonesia prepares to implement B40 in January

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

B40 will 3 mln heaps feedstock, GAPKI states

Malaysia palm oil standard at highest because mid-2022

India might withdraw import tax hike in the middle of inflation, Mistry says

(Adds analyst comments, updates Malaysia’s palm oil standard rate)

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, however costs are anticipated to remain raised due to scheduled growth of the nation’s biodiesel mandate, industry experts stated.

The palm oil benchmark rate in Malaysia has increased more than 35% this year, lifted by sluggish output and Indonesia’s strategy to increase the obligatory domestic biodiesel mix to 40% in January from 35% now in an effort to lower fuel imports.

Palm oil output next year in top producer Indonesia is anticipated to recuperate by 1.5 million metric loads compared to an approximated 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, said he anticipates Indonesia’s palm oil production to increase by as much as 2 million heaps next year after a 2.5 million lot drop in 2024.

While Indonesia’s output is forecast to improve, provide from elsewhere and of other vegetable oils is seen tightening.

Palm oil output in neighbouring Malaysia is expected to dip a little next year after increasing by an estimated 1 million lots 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 cost 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 said additional feedstock of around 3 million tons will be required for B40 application, deteriorating export supply.

The present palm oil premium has actually already 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 lot 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 incredibly bullish, we need to be mindful,” stated Dorab Mistry, director at Indian consumer items company Godrej International.

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

Mielke and Mistry advised Indonesia to

think about delaying

B40 application on concern about its influence on food consumers.

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

import responsibility 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