B40 program in Indonesia will affect the global edible oil market

10-Oct-2024 12:57 PM

Jakarta. Indonesia, the world's largest producer and exporter of palm oil, has planned to implement a mandatory rule of using 40 percent palm oil in biodiesel production, which will increase the demand and consumption of this important vegetable oil in its domestic division and reduce the stock for export.

According to a leading analyst, if this rule is implemented, the supply of palm oil in the global market will decrease by 15-17 lakh tonnes.

A senior analyst of the world famous newsletter Oil World has said that global production of palm oil may increase by 23 lakh tonnes during the 2024-25 season as compared to 2023-24.

According to another analyst, the futures price of crude palm oil (CPO) at BMD Exchange, Kuala Lumpur is likely to be around 4000 ringgit ($ 933.50) per tonne during the year 2025.

Currently, its futures price is running at a five-month high. The average futures price of palm oil during the current year so far has been 4062.50 ringgit per tonne.

The total production of palm oil in Malaysia is estimated to increase to 194 lakh tonnes during the year 2024, which is about 8.50 lakh tonnes more than the production of 185.50 lakh tonnes in the year 2023.

Malaysia is the second largest producer and exporter of palm oil in the world. This year the weather conditions there have been largely favorable for palm production.

On the other hand, in the largest producer and exporter country - Indonesia, the total production of palm oil during the year 2023 was estimated to be 548.40 lakh tonnes,

whereas in the year 2024 it is likely to decrease by 10 lakh tonnes. There is a plan to implement the B40 program from next year.