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 tons feedstock, GAPKI states

Malaysia palm oil benchmark at highest given that mid-2022

India might withdraw import tax trek amid inflation, Mistry says

(Adds analyst comments, updates Malaysia's palm oil standard cost)

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, but costs are anticipated to stay elevated due to organized expansion of the nation's biodiesel mandate, industry experts said.

The palm oil standard cost in Malaysia has actually risen more than 35% this year, raised by sluggish output and Indonesia's strategy to increase the compulsory domestic biodiesel blend to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in leading manufacturer Indonesia is anticipated to recuperate by 1.5 million metric lots compared with an approximated drop of just over a million loads this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

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

While Indonesia's output is anticipated to improve, provide from somewhere else and of other veggie oils is seen tightening.

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

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

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the previous 7 weeks has actually been "frightening" for buyers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million heaps will be needed for B40 execution, wearing down export supply.

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

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric load 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 extremely bullish, we need to beware," said Dorab Mistry, director at Indian consumer products business Godrej International.

He forecast the Malaysian cost around 5,000 ringgit and above until June 2025.

Mielke and Mistry urged Indonesia to

think about postponing

B40 execution on issue about its effect on food customers.

Meanwhile, Mistry anticipated leading 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)