Indonesia prepares to implement B40 in January

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

B40 will require extra 3 mln loads feedstock, GAPKI states

Malaysia palm oil standard at highest since mid-2022

India may withdraw import tax hike in the middle of inflation, Mistry states

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

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recuperate in 2025 after an expected drop this year, but prices are expected to remain raised due to organized growth of the nation's biodiesel required, industry experts stated.

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

Palm oil output next year in top producer Indonesia is expected to recuperate by 1.5 million metric lots compared with an estimated drop of just over a million loads this year, Julian McGill, handling director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research firm Oil World, said 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, from somewhere else and of other vegetable oils is seen tightening.

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

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

'FRIGHTENING' PRICE SURGE

The price rise in palm oil in the past seven weeks has actually been "frightening" for purchasers, 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 said extra feedstock of around 3 million tons will be required for B40 execution, eroding export supply.

The present palm oil premium has already triggered 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 ton 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 take care," said Dorab Mistry, director at Indian customer items company Godrej International.

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

Mielke and Mistry urged Indonesia to

think about delaying

B40 implementation on concern about its effect on food consumers.

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

import responsibility walking

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