Indonesia prepares to implement B40 in January

Because case, costs might rally 10%-15% in Jan-March, Mielke states

B40 will need additional 3 mln tons feedstock, GAPKI says

Malaysia palm oil criteria at greatest because mid-2022

India may withdraw import tax trek amidst inflation, Mistry states

(Adds analyst comments, 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 expected drop this year, but costs are expected to stay raised due to organized expansion of the country's biodiesel required, market analysts stated.

The palm oil standard rate in Malaysia has actually increased more than 35% this year, raised by sluggish 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 leading manufacturer Indonesia is expected to recuperate by 1.5 million metric loads compared to an estimated drop of simply over a million tons this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

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

While Indonesia's output is forecast to improve, supply 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 since combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.

'FRIGHTENING' PRICE SURGE

The rate rise in palm oil in the previous 7 weeks has been "frightening" for buyers, 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 loads will be required for B40 application, deteriorating export supply.

The current palm oil premium has currently caused 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 approximated.

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

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

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

Mielke and Mistry advised Indonesia to

think about delaying

B40 implementation on issue about its effect on food customers.

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

import duty walking

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