Indonesia plans to execute B40 in January

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

B40 will need additional 3 mln loads feedstock, GAPKI states

Malaysia palm oil standard at greatest since mid-2022

India may withdraw import tax hike amidst inflation, Mistry says

(Adds analyst remarks, updates Malaysia's palm oil benchmark cost)

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 expansion of the nation's biodiesel required, market experts stated.

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

Palm oil output next year in leading manufacturer Indonesia is anticipated to recover by 1.5 million metric heaps compared to an approximated 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 study 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 heap drop in 2024.

While Indonesia's output is anticipated to improve, provide from in other places and of other veggie oils is seen tightening up.

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

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

'FRIGHTENING' PRICE SURGE

The rate surge 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 the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million loads will be needed for B40 execution, eroding export supply.

The present palm oil premium has 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 heap in 2025, McGill of Glenauk approximated.

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

"Sentiment today is red-hot and extremely bullish, we need to be careful," said Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry urged Indonesia to

think about delaying

B40 implementation on issue about its effect on food consumers.

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

import responsibility walking

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)