Global: Crude palm oil price to average higher in 2025

Published 2024년 12월 23일

Tridge summary

The palm oil market is expected to keep facing high prices in 2025 due to supply-side issues, including adverse weather conditions and slow replanting progress in major producing countries. Despite these challenges, demand for palm oil, particularly in biodiesel production, remains strong, with Indonesia planning to increase its biodiesel blend rate. Factors such as geopolitical tensions affecting substitute oils, biodiesel mandates, and edible oil consumption are expected to counterbalance the downside risks. The market's dynamics and prices are influenced by various factors, including production peaks and declines, inventories, and demand from key markets like China and India.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

The palm oil market continues to face significant uncertainties heading into 2025, with supply-side challenges exacerbated by adverse weather conditions and a slower pace of replanting. Palm oil prices in 2024 have remained elevated due to global supply constraints, driven by reduced exports from the largest palm oil producer, Indonesia, as well as recent adverse weather conditions in Malaysia. Looking ahead, palm oil prices are expected to remain high, averaging RM4,600/metric tonne (MT) in 2025 (2024F: RM4,200/MT; 2023: RM3,812/MT). Demand for palm oil in biodiesel production remains robust, supported by policy mandates in Indonesia. The biodiesel blend rate is set to increase to 40% (B40) in 2025 from the current 35% (B35), with further plans to raise it to 50% (B50). The Indonesian Palm Oil Association (GAPKI) estimates that achieving B40 will require an additional 1.7 million MT of palm oil, while reaching B50 could drive demand higher by an additional 5 million MT. This ...

Source: UkrAgroConsult