Indonesia plans to carry out B40 in January

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

B40 will need extra 3 mln heaps feedstock, GAPKI says

Malaysia palm oil criteria at highest since mid-2022

India may withdraw import tax hike amidst inflation, Mistry says

(Adds analyst comments, updates Malaysia's palm oil criteria price)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recuperate in 2025 after an expected drop this year, however rates are expected to stay raised due to scheduled expansion of the country's biodiesel mandate, market experts stated.

The palm oil benchmark price in Malaysia has risen more than 35% this year, lifted by sluggish output and Indonesia's plan to increase the necessary domestic biodiesel mix to 40% in January from 35% now in an effort to minimize fuel imports.

Palm oil output next year in leading producer Indonesia is expected to recover by 1.5 million metric lots compared to an approximated drop of just over a million lots this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.

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

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

Palm oil output in neighbouring Malaysia is expected to dip a little next year after increasing by an estimated 1 million tons in 2024.

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

'FRIGHTENING' PRICE SURGE

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

The Indonesia Palm Oil Association said additional feedstock of around 3 million tons will be required for B40 application, supply.

The existing palm oil premium has currently triggered 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 lot 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 very bullish, we need to beware," said Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry advised Indonesia to

consider postponing

B40 execution on issue about its impact on food consumers.

Meanwhile, Mistry expected top palm oil importer India to withdraw its

import responsibility walking

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