Is it expected to remain expensive in 2025 as well?
Is it expected to remain expensive in 2025 as well?There will be an atmosphere of uncertainty in the palm oil market in 2025 as well. There are difficulties in the supply of oil due to bad weather and delay in replanting palm trees. Palm oil prices have been very high in 2024. The main reason for this is the reduced export of oil from indonesia and bad weather in Malaysia.At the same time, the demand for palm oil for making biodiesel is continuously increasing in Indonesia. This demand is increasing even faster due to government policies. Currently, 35% palm oil is mixed in diesel (B35). In 2025, it will be increased to 40% (B40). There is a plan to further increase it to 50% (B50).According to the Indonesian Palm oil Association (GAPKI), 17 lakh metric tons more palm oil will be needed for B40 biodiesel. 50 lakh metric tons more palm oil will be needed for B50 biodiesel. This will increase the demand for palm oil and its prices may also remain high. It is estimated that the average price of palm oil in 2025 will be 4600 ringgit per metric ton. This price was 4200 ringgit in 2024 and 3812 ringgit in 2023.Palm oil shortage: Will other oils be able to compensate?India uses 25-26 million tons of edible oil every year, out of which 9-95 million tons is palm oil. This oil is mostly imported from abroad. If there is a shortage of palm oil, it can be compensated to some extent by importing soybean and sunflower oil. soybean oil is mainly imported from argentina and Brazil, while sunflower oil comes from Russia, ukraine and Romania.In november 2023, india imported 08.7 million tonnes of palm oil, which decreased to 08.4 million tonnes in november 2024. At the same time, the import of soybean oil increased from 01.5 million tonnes to 04.1 million tonnes and the import of sunflower oil increased from 01.3 million tonnes to 03.4 million tonnes. Record production of soybean is expected in the world in 2024-25. It is expected that despite the shortage of palm oil, the total supply of edible oil in india will remain and the prices will not increase much.