Indonesia plans to implement B40 in January

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

B40 will require additional 3 mln heaps feedstock, GAPKI says

Malaysia palm oil benchmark at highest since mid-2022

India might withdraw import tax hike in the middle of inflation, Mistry states

(Adds analyst 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 recuperate in 2025 after an expected drop this year, however costs are expected to stay raised due to scheduled growth of the country's biodiesel mandate, market analysts said.

The palm oil criteria price in Malaysia has risen more than 35% this year, raised by slow output and Indonesia's plan to increase the compulsory domestic biodiesel mix to 40% in January from 35% now in an effort to lower fuel imports.

Palm oil output next year in leading manufacturer Indonesia is expected to recuperate by 1.5 million metric heaps compared to an estimated drop of simply over a million heaps this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research company Oil World, stated he expects Indonesia's palm oil production to increase 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 improve, provide from in other places and of other veggie oils is seen tightening.

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

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

'FRIGHTENING' PRICE SURGE

The cost rise in palm oil in the past seven weeks has been "frightening" for purchasers, 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 implementation, eroding export supply.

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

Malaysian palm oil prices 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 greatest because mid-2022.

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

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

Mielke and Mistry prompted Indonesia to

consider postponing

B40 application on issue about its influence on food customers.

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

import duty walking

imposed from September after elections in the state of in November. ($1 = 4.3800 ringgit) (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy; Editing by John Mair, Jane Merriman and Daren Butler)