Indonesia prepares to implement B40 in January

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

B40 will require extra 3 mln loads feedstock, GAPKI states

Malaysia palm oil criteria at highest since mid-2022

India may withdraw import tax hike amid inflation, Mistry states

(Adds expert remarks, updates Malaysia's palm oil criteria price)

By Bernadette Christina

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

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

Palm oil output next year in leading producer Indonesia is anticipated to recuperate by 1.5 million metric tons compared to an estimated drop of simply over a million lots 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 expects Indonesia's palm oil production to increase by as much as 2 million tons 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 anticipated to dip a little next year after increasing by an estimated 1 million heaps in 2024.

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

'FRIGHTENING' PRICE SURGE

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

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

The present palm oil premium has already caused palm to lose market share against other oils, Mielke added.

Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric heap 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 beware," said Dorab Mistry, director at Indian consumer goods International.

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

Mielke and Mistry prompted Indonesia to

consider postponing

B40 application on concern about its effect on food consumers.

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

import task 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; Editing by John Mair, Jane Merriman and Daren Butler)