JAKARTA – ISTA Mielke Gmbh Executive Director Thomas Mielke predicted that the price of crude palm oil (CPO) will increase next year. But he was worried that the price increase will cause negative response from consumers as the rise of CPO price and demand from biofuel industries are not in line with the stagnant production of palm oil.
“Global producers will be reluctant to use CPO as feedstock because its price will increase,” Thomas Mielke told participants of the 20th Indonesian Palm Oil Conference and 2025 Price Outlook (IPOC 2024) in Nusa Dua , Bali, on Friday (08/11/2024).
Mielke said that a number of biofuel industries in the USA and Europe are facing financial pressures on their performances. Even Brazil had wanted to resign from its biodiesel mandatory program if prices continue to increase.
Mielke said that Indonesia should limit the implementation of its biodiesel mandatory program only up to biodiesel 35 percent (B35). “The implementation of B40 mandatory program will result in a decrease of palm oil exports from Indonesia.
“If the government of Indonesia persists to implement the mandatory program of B40, then prices of vegetable oils such as CPO and soybean will increase by at least 10%-15% to meet the needs of foods sector and other industries,” said Mielke.
He expressed his concern over the CPO production in Indonesia, which tends to be stagnant until 2026. “The producers of canola, rapeseed, and sunflowers will take advantage from the price increase and supply shortage of vegetable oils to expand their market shares,” he said.
He said that Indonesian growers are facing moratorium on expanding oil palm plantations, some of which are already mature and in low productivity and require replanting.
Director of Godrej International Ltd, Dorab Mistry projected that the price of CPO during the first semester 2025 will reach MYR5,000 per ton, as a result of the production decrease in Indonesia and Thailand.
According to him, if the CPO price continues to rise, then it will affect the competitiveness of palm oil against other vegetable oils at the global market. “It’s potential to make CPO no longer seen as the best choice of vegetable oil with low price,” he said.
At the same occasion, Managing Director of Glenauk Economics, Julian McGill said that the increase of CPO price is a reflection of low supply at the market. “The slow growth of palm plantation areas had resulted in stagnant production of palm oil,” he said.
Julian said in 2019, Indonesia’s export of CPO reached 36.17 million tons, which had been surpassed by export of soybean at 40 million tons in 2023. “Look, palm oil exports reached the peak in 2019 and since then never again return to the same level. Currently, the CPO price has been in the category of premium vegetable oils like rapeseed,” he said. (*)
Source: sawitku.id
