Lang
Demand for Malaysian palm oil could rise if Indonesia increases export levies to support its higher biodiesel mandate, according to TA Securities.
The firm said raising Indonesia’s export levy to 10% would add $26.49 per tonne, making Indonesian crude palm oil more expensive compared with Malaysian palm oil.
It noted that Indonesian palm oil is already trading at a premium of $146.30 per tonne over Malaysian palm oil.
TA Securities said relatively higher export duties and taxes on Indonesian crude palm oil could shift some demand toward Malaysia, supporting Malaysian palm oil prices and market share.
The proposed increase follows delays in Indonesia’s B40 biodiesel program, which would raise the biodiesel blend to 40% from 35% currently.
The delay is linked to infrastructure adjustments, supply-chain readiness, logistics, and funding challenges.
TA Securities said Indonesia’s biodiesel support fund may face pressure in covering the price gap between biodiesel and conventional diesel.
The agency managing Indonesia’s palm oil plantation fund estimated 2025 funding needs at 47 trillion rupiah, compared with expected revenue of 21 trillion rupiah.
The firm concluded that B40 implementation may take longer than initially planned and could move into the second half of 2025.