Indonesia prepares to carry out B40 in January

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

B40 will need additional 3 mln heaps feedstock, GAPKI says

oil criteria at highest because mid-2022

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

(Adds analyst remarks, updates Malaysia's palm oil criteria rate)

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 prices are expected to stay elevated due to organized expansion of the country's biodiesel mandate, industry experts said.

The palm oil benchmark cost in Malaysia has risen more than 35% this year, raised by slow output and Indonesia's strategy to increase the obligatory 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 expected to recuperate by 1.5 million metric heaps compared to an estimated drop of just 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 study firm Oil World, said he expects 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 improve, provide from somewhere else and of other vegetable oils is seen tightening.

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

"We would require a recovery in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.

'FRIGHTENING' PRICE SURGE

The price surge in palm oil in the past seven weeks has actually been "frightening" for purchasers, 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 said extra feedstock of around 3 million heaps will be required for B40 application, wearing down export supply.

The existing palm oil premium has actually currently caused palm to lose market share versus other oils, Mielke added.

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 greatest considering that mid-2022.

"Sentiment right now is red-hot and exceptionally bullish, we have to be cautious," said Dorab Mistry, director at Indian durable goods business Godrej International.

He anticipated the Malaysian cost around 5,000 ringgit and above till June 2025.

Mielke and Mistry urged Indonesia to

think about postponing

B40 application on issue about its effect on food consumers.

Meanwhile, Mistry expected 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