Indonesia plans to implement B40 in January

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

B40 will require additional 3 mln loads feedstock, GAPKI says

Malaysia palm oil benchmark at highest given that mid-2022

India might withdraw import tax trek amid inflation, Mistry states

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

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, however costs are expected to stay raised due to planned expansion of the nation's biodiesel required, industry experts said.

The palm oil criteria cost in Malaysia has risen more than 35% this year, raised by sluggish output and Indonesia's strategy 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 top manufacturer Indonesia is anticipated to recover by 1.5 million metric lots compared with an estimated drop of just over a million tons 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 company Oil World, said he anticipates 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, supply from somewhere else and of other vegetable oils is seen tightening.

Palm oil output in neighbouring Malaysia is expected to dip slightly 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 rise in palm oil in the previous 7 weeks has actually been "frightening" for buyers, 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 stated additional feedstock of around 3 million loads will be required for B40 application, wearing down export supply.

The existing 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 load in 2025, McGill of Glenauk approximated.

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

"Sentiment today is red-hot and exceptionally bullish, we have to be mindful," stated 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 advised Indonesia to

think about postponing

B40 execution on concern about its effect on food consumers.

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

import task 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; Editing by John Mair, Jane Merriman and Daren Butler)