Indonesia prepares to implement B40 in January

Because case, prices might rally 10%-15% in Jan-March, Mielke states

B40 will require extra 3 mln heaps feedstock, GAPKI says

Malaysia palm oil benchmark at greatest since mid-2022

India may withdraw import tax hike amid inflation, Mistry says

(Adds expert comments, updates Malaysia's palm oil criteria rate)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is anticipated to recover in 2025 after an expected drop this year, but costs are anticipated to remain elevated due to scheduled expansion of the nation's biodiesel mandate, market analysts stated.

The palm oil standard rate in Malaysia has increased more than 35% this year, raised by slow output and Indonesia's plan to increase the obligatory domestic biodiesel mix to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in leading producer Indonesia is expected to recuperate by 1.5 million metric loads compared to a projected drop of just over a million tons this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research study company Oil World, said he expects Indonesia's palm oil production to increase by as much as 2 million tons next year after a 2.5 million heap drop in 2024.

While Indonesia's output is forecast to enhance, supply from somewhere else and of other veggie oils is seen tightening.

Palm oil output in neighbouring Malaysia is anticipated to dip slightly next year after increasing by an estimated 1 million loads in 2024.

"We would require a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining," Mielke said.

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the previous seven weeks has been "frightening" for purchasers, Mielke stated, including that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.

The Oil Association said extra feedstock of around 3 million loads will be needed for B40 implementation, wearing down export supply.

The current palm oil premium has currently triggered palm to lose market share versus other oils, Mielke added.

Malaysian palm oil rates are seen trading at around $950 to $1,050 per metric heap in 2025, McGill of Glenauk approximated.

Benchmark Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the highest considering that mid-2022.

"Sentiment right now is red-hot and incredibly bullish, we need to take care," stated Dorab Mistry, director at Indian durable goods business Godrej International.

He forecast the Malaysian rate around 5,000 ringgit and above till June 2025.

Mielke and Mistry prompted Indonesia to

think about postponing

B40 execution on concern about its influence on food consumers.

Meanwhile, Mistry anticipated leading palm oil importer India to withdraw its

import responsibility hike

enforced from September after elections in the state of Maharashtra in November. ($1 = 4.3800 ringgit) (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy