Indonesia prepares to execute B40 in January
Because case, costs might rally 10%-15% in Jan-March, Mielke says
B40 will need additional 3 mln loads feedstock, GAPKI says
Malaysia palm oil standard at greatest given that mid-2022
India may withdraw import tax hike in the middle of inflation, Mistry states
(Adds expert comments, updates Malaysia's palm oil criteria rate)
By Bernadette Christina
NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recuperate in 2025 after an anticipated drop this year, but rates are anticipated to remain elevated due to organized growth of the nation's biodiesel mandate, market analysts said.
The palm oil benchmark rate in Malaysia has risen more than 35% this year, lifted by sluggish output and Indonesia's strategy to increase the obligatory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.
Palm oil output next year in leading manufacturer Indonesia is expected to recuperate by 1.5 million metric loads compared with an estimated drop of just 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 firm Oil World, stated he expects Indonesia's palm oil production to increase by as much as 2 million loads next year after a 2.5 million ton drop in 2024.
While Indonesia's output is forecast to improve, provide from somewhere else and of other vegetable oils is seen tightening.
Palm oil output in neighbouring Malaysia is anticipated to dip a little next year after increasing by an estimated 1 million loads in 2024.
"We would require a recovery in palm in 2025 because combined exports of soya, sunflower and rapeseed oils are declining," Mielke stated.
'FRIGHTENING' PRICE SURGE
The cost rise in palm oil in the previous seven weeks has been "frightening" for purchasers, Mielke stated, 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 loads will be needed for B40 execution, wearing down export supply.
The existing palm oil premium has 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 load in 2025, McGill of Glenauk estimated.
Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the highest because mid-2022.
"Sentiment right now is red-hot and extremely bullish, we have to take care," stated Dorab Mistry, director at Indian durable goods business Godrej International.
He anticipated the Malaysian cost around 5,000 ringgit and above till June 2025.
Mielke and Mistry advised Indonesia to
consider postponing
B40 application on issue about its influence on food consumers.
Meanwhile, Mistry expected leading palm oil importer India to withdraw its
import task 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
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Indonesia Palm Oil Output Seen Recovering in 2025, However Biodiesel
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