Indonesia prepares to implement B40 in January

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

B40 will need extra 3 mln heaps feedstock, GAPKI says

Malaysia palm oil criteria at greatest given that mid-2022

India might withdraw import tax hike amidst 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 recover in 2025 after an expected drop this year, but costs are expected to remain elevated due to organized growth of the country's biodiesel mandate, market experts stated.

The palm oil criteria price in Malaysia has actually risen more than 35% this year, lifted by slow output and Indonesia's strategy to increase the compulsory 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 recover by 1.5 million metric lots 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 anticipates Indonesia's palm oil production to by as much as 2 million lots next year after a 2.5 million ton drop in 2024.

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

Palm oil output in neighbouring Malaysia is anticipated to dip a little 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 stated.

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the past seven weeks has been "frightening" for purchasers, 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 said extra feedstock of around 3 million heaps will be needed for B40 application, eroding export supply.

The existing palm oil premium has already caused palm to lose market share against other oils, Mielke added.

Malaysian palm oil rates 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 greatest given that mid-2022.

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

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

Mielke and Mistry prompted Indonesia to

consider delaying

B40 implementation on concern about its effect on food customers.

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

import responsibility 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