Indonesia plans to implement B40 in January

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

B40 will require additional 3 mln tons feedstock, GAPKI states

Malaysia palm oil standard at greatest because mid-2022

India may withdraw import tax hike amid inflation, Mistry states

(Adds expert 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 anticipated drop this year, however rates are anticipated to remain elevated due to scheduled expansion of the country's biodiesel mandate, market analysts said.

The palm oil standard cost in Malaysia has increased more than 35% this year, raised by slow output and Indonesia's plan to increase the compulsory 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 loads compared to an estimated drop of simply over a million loads this year, Julian McGill, managing 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 heaps next year after a 2.5 million lot drop in 2024.

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

Palm oil output in neighbouring Malaysia is anticipated to dip somewhat next year after increasing by an estimated 1 million lots 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 previous 7 weeks has actually been "frightening" for buyers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

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

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

Malaysian palm oil rates are seen trading at around $950 to $1,050 per metric heap in 2025, McGill of Glenauk estimated.

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

"Sentiment today is red-hot and very bullish, we have to take care," said Dorab Mistry, director at Indian customer 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 delaying

B40 implementation on concern about its effect on food consumers.

Meanwhile, Mistry anticipated top 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)