Indonesia prepares to implement B40 in January

Because case, rates may rally 10%-15% in Jan-March, Mielke states

B40 will require extra 3 mln lots feedstock, GAPKI states

Malaysia palm oil criteria at highest considering that mid-2022

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

(Adds analyst remarks, updates Malaysia's palm oil benchmark price)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recover in 2025 after an expected drop this year, however costs are expected to remain raised due to organized expansion of the nation's biodiesel required, market experts said.

The palm oil benchmark price in Malaysia has risen more than 35% this year, lifted by slow output and Indonesia's strategy to increase the mandatory domestic biodiesel blend to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in top producer Indonesia is anticipated to recover by 1.5 million metric loads compared with an approximated drop of simply over a million heaps this year, Julian McGill, handling director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.

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

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

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

"We would need a healing in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke stated.

'FRIGHTENING' PRICE SURGE

The rate surge in palm oil in the past seven weeks has actually been "frightening" for buyers, Mielke said, adding that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million loads will be needed for B40 execution, eroding export supply.

The present palm oil premium has currently triggered palm to lose market share against other oils, Mielke included.

Malaysian palm oil rates 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 greatest given that mid-2022.

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

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

Mielke and Mistry prompted Indonesia to

think about delaying

B40 execution on concern about its impact on food consumers.

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

import task walking

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)