InfoSAWIT, JAKARTA – Dorab Mistry, Director of Godrej International, has presented his outlook on palm oil production and pricing trends for 2024-25, forecasting limited growth and price increases driven by aging plantations, stagnant land expansion, and the slow adoption of new technology in the industry.
In a presentation at Globoil India in September 2024, Mistry highlighted key factors affecting palm oil production in Malaysia and Indonesia. While Malaysia’s production exceeded initial expectations, estimated at 19.7 million metric tons, Indonesia’s output, initially forecasted to decline, may stabilize thanks to favorable growth conditions in 2024. “The age profile of plantations is worsening,” Mistry noted, stressing the need for innovation in palm oil cultivation compared to the more rapid advancements in other oilseed crops.
2024-25 Production and Market Sentiment Shifts
The industry sentiment has turned more optimistic following Indonesia's announcement of its B40 biodiesel policy, although Mistry cautioned that this shift could affect palm oil’s competitiveness. He noted that Indonesia’s previous transition from B30 to B35 took around seven months to implement fully, suggesting a similar timeline for B40. Additionally, high production levels through November may lead to stock increases.
Mistry’s price projections take into account various global and regional factors. He predicts that futures prices on the Bursa Malaysia Derivatives (BMD) will fluctuate between MYR 3,700 and MYR 4,500 per metric ton through June 2025. A new bull market is expected between January and March 2025, driven by demand surges for Chinese New Year and Ramadan in the first quarter.
Key factors anticipated to influence palm oil prices in 2024-25 include supply and demand dynamics, new biofuel policies and incentives, weather impacts in South America, fluctuations in the U.S. dollar exchange rate, global crude oil prices, climate uncertainties, and potential reductions in India’s import duties.
Mistry concluded that the industry’s stability is closely tied to external conditions. “With a combination of strong demand cycles early next year, the market is likely to see a bullish trend,” he said, though he warned that volatility remains high due to geopolitical and environmental uncertainties. (T2)
