Indonesia prepares to implement B40 in January

Because case, rates might rally 10%-15% in Jan-March, Mielke says

B40 will require additional 3 mln tons feedstock, GAPKI says

Malaysia palm oil criteria at greatest because mid-2022

India may withdraw import tax trek in the middle of inflation, Mistry says

(Adds expert remarks, updates Malaysia's palm oil benchmark cost)

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, however prices are anticipated to remain raised due to organized expansion of the country'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 necessary domestic biodiesel mix to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in top manufacturer Indonesia is expected to recuperate by 1.5 million metric loads compared with a projected drop of simply over a million heaps 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, said he anticipates Indonesia's palm oil production to increase by as much as 2 million loads next year after a 2.5 million load drop in 2024.

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

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

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

'FRIGHTENING' PRICE SURGE

The price rise in palm oil in the past 7 weeks has been "frightening" for purchasers, Mielke said, adding 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 heaps will be needed for B40 implementation, wearing down export supply.

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

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 considering that mid-2022.

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

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

Mielke and Mistry prompted Indonesia to

think about postponing

B40 implementation on concern about its effect on food customers.

Meanwhile, Mistry expected top 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)