Indonesia prepares to execute B40 in January

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

B40 will require extra 3 mln heaps feedstock, GAPKI states

Malaysia palm oil benchmark at greatest because mid-2022

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

(Adds analyst comments, 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 remain elevated due to scheduled growth of the nation's biodiesel mandate, market experts stated.

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

Palm oil output next year in leading manufacturer Indonesia is anticipated to recover by 1.5 million metric heaps compared with an estimated drop of simply over a million tons 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 anticipates Indonesia's palm oil production to increase by as much as 2 million heaps next year after a 2.5 million load drop in 2024.

While Indonesia's output is anticipated to improve, provide from elsewhere and of other veggie oils is seen tightening.

Palm oil output in neighbouring Malaysia is anticipated to dip slightly next year after increasing by an approximated 1 million tons in 2024.

"We would require a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining," Mielke said.

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the previous seven weeks has been "frightening" for buyers, Mielke said, 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 needed for B40 execution, wearing down export supply.

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

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric ton 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 right now is red-hot and exceptionally bullish, we have to be careful," stated Dorab Mistry, director at Indian consumer goods business Godrej International.

He anticipated 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 issue about its influence on food consumers.

Meanwhile, leading palm oil importer India to withdraw its

import responsibility hike

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