Indonesia prepares to implement B40 in January

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

B40 will need extra 3 mln tons feedstock, GAPKI states

Malaysia palm oil benchmark at greatest because mid-2022

India might withdraw import tax trek 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 anticipated to recuperate in 2025 after an expected drop this year, but costs are expected to stay elevated due to organized growth of the country's biodiesel mandate, industry experts said.

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

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

Thomas Mielke, head of Hamburg-based research study company Oil World, said he expects 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 forecast to enhance, supply from elsewhere and of other veggie oils is seen tightening.

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

"We would require a healing 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 past 7 weeks has actually been "frightening" for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million loads will be required for B40 application, deteriorating export supply.

The present palm oil premium has already 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 highest because mid-2022.

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

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

Mielke and Mistry prompted Indonesia to

consider postponing

B40 execution on issue about its influence on food consumers.

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

import responsibility 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)