Indonesia prepares to implement B40 in January

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

B40 will require extra 3 mln lots feedstock, GAPKI says

Malaysia palm oil benchmark at greatest considering that mid-2022

India may withdraw import tax hike in the middle of inflation, Mistry says

(Adds expert comments, updates Malaysia's palm oil standard cost)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is anticipated to recover in 2025 after an expected drop this year, but costs are anticipated to remain elevated due to planned expansion of the country's biodiesel mandate, industry experts said.

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

Palm oil output next year in leading producer Indonesia is expected to recover by 1.5 million metric tons compared with an approximated drop of just over a million loads this year, Julian McGill, managing 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 anticipates Indonesia's palm oil production to increase by as much as 2 million heaps next year after a 2.5 million heap drop in 2024.

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

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 declining," Mielke stated.

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the past 7 weeks has been "frightening" for buyers, Mielke said, including 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 heaps will be required for B40 execution, wearing down export supply.

The existing palm oil premium has actually currently caused palm to lose market share against 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 approximated.

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

"Sentiment today is red-hot and exceptionally bullish, we need to beware," stated Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about delaying

B40 application on concern about its influence on food customers.

Meanwhile, Mistry expected 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)