Indonesia prepares to implement B40 in January

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

B40 will need extra 3 mln lots feedstock, GAPKI states

Malaysia palm oil benchmark at highest because mid-2022

India may withdraw import tax hike amid inflation, Mistry says

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

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

Palm oil output next year in leading producer Indonesia is anticipated to recover by 1.5 million metric heaps compared with a projected 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 study firm Oil World, stated he anticipates Indonesia's palm oil production to increase by as much as 2 million heaps next year after a 2.5 million ton drop in 2024.

While Indonesia's output is forecast to enhance, provide from in other places and of other vegetable oils is seen tightening.

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

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

'FRIGHTENING' PRICE SURGE

The rate rise in palm oil in the past 7 weeks has been "frightening" for buyers, Mielke said, 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 extra feedstock of around 3 million loads will be needed for B40 application, deteriorating export supply.

The existing palm oil premium has currently caused palm to lose market share versus 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 have to be cautious," stated Dorab Mistry, director at Indian customer goods business Godrej International.

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

Mielke and Mistry advised Indonesia to

consider delaying

B40 execution 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 in November. ($1 = 4.3800 ringgit) (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy