Indonesia prepares to execute B40 in January

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

B40 will need extra 3 mln loads feedstock, GAPKI says

Malaysia palm oil benchmark at highest because mid-2022

India may withdraw import tax hike amidst inflation, Mistry says

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

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is anticipated to recover in 2025 after an anticipated drop this year, but costs are anticipated to remain elevated due to scheduled expansion of the nation's biodiesel required, industry experts stated.

The palm oil benchmark rate in Malaysia has actually increased more than 35% this year, lifted by slow output and Indonesia's plan to increase the mandatory domestic biodiesel mix to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in top manufacturer Indonesia is anticipated to recuperate by 1.5 million metric heaps compared to a projected drop of just 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 company Oil World, stated he anticipates Indonesia's palm oil production to increase by as much as 2 million lots next year after a 2.5 million lot drop in 2024.

While Indonesia's output is anticipated to enhance, supply from elsewhere and of other vegetable oils is seen tightening.

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

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

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the previous seven weeks has actually 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 stated extra feedstock of around 3 million heaps will be required for B40 application, deteriorating export supply.

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

Malaysian palm oil costs 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 because mid-2022.

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

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

Mielke and Mistry advised Indonesia to

think about delaying

B40 application 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)