Indonesia prepares to implement B40 in January

In that case, costs may rally 10%-15% in Jan-March, Mielke says

B40 will require additional 3 mln heaps feedstock, GAPKI states

Malaysia palm oil standard at highest given that mid-2022

India might withdraw import tax hike in the middle of inflation, Mistry states

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

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recuperate in 2025 after an expected drop this year, however rates are expected to stay elevated due to scheduled expansion of the biodiesel required, market experts stated.

The palm oil criteria cost in Malaysia has actually risen more than 35% this year, raised by slow output and Indonesia's strategy to increase the mandatory domestic biodiesel mix to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top manufacturer Indonesia is expected to recover by 1.5 million metric lots compared with a projected drop of just over a million heaps this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research firm Oil World, stated he anticipates Indonesia's palm oil production to increase by as much as 2 million heaps next year after a 2.5 million load drop in 2024.

While Indonesia's output is anticipated to improve, provide from in other places and of other vegetable oils is seen tightening up.

Palm oil output in neighbouring Malaysia is expected to dip somewhat next year after increasing by an approximated 1 million tons in 2024.

"We would need a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke stated.

'FRIGHTENING' PRICE SURGE

The rate surge in palm oil in the previous 7 weeks has been "frightening" for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.

The Indonesia Palm Oil Association said extra feedstock of around 3 million loads will be required for B40 application, deteriorating export supply.

The existing palm oil premium has actually already triggered palm to lose market share against other oils, Mielke included.

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric lot in 2025, McGill of Glenauk estimated.

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

"Sentiment right now is red-hot and exceptionally bullish, we need to be mindful," said Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about delaying

B40 execution on issue about its effect on food consumers.

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

import duty hike

imposed from September after elections in the state of Maharashtra in November. ($1 = 4.3800 ringgit) (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy; Editing by John Mair, Jane Merriman and Daren Butler)