Indonesia prepares to execute B40 in January

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

B40 will require extra 3 mln tons feedstock, GAPKI says

Malaysia palm oil criteria at highest considering that mid-2022

India might withdraw import tax hike amidst inflation, Mistry states

(Adds expert comments, updates Malaysia's palm oil standard rate)

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 anticipated to stay elevated due to organized growth of the country's biodiesel required, market analysts stated.

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

Palm oil output next year in leading producer Indonesia is anticipated to recuperate by 1.5 million metric lots compared with a projected drop of simply over a million loads this year, Julian McGill, handling director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

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

While Indonesia's output is forecast to improve, supply from somewhere else and of other veggie oils is seen tightening up.

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

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

'FRIGHTENING' PRICE SURGE

The cost rise in palm oil in the past 7 weeks has been "frightening" for buyers, Mielke stated, including that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million lots will be required for B40 execution, eroding export supply.

The current palm oil premium has actually already caused palm to lose market share versus other oils, Mielke included.

Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric load in 2025, McGill of Glenauk approximated.

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

"Sentiment right now is red-hot and extremely bullish, we have to be careful," said Dorab Mistry, director at Indian customer items company Godrej International.

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

Mielke and Mistry urged Indonesia to

consider delaying

B40 implementation on concern about its effect on food consumers.

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

import duty hike

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; Editing by John Mair, Jane Merriman and Daren Butler)