Indonesia plans to implement B40 in January

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

B40 will require extra 3 mln loads feedstock, GAPKI states

Malaysia palm oil criteria at highest since mid-2022

India might withdraw import tax hike amidst inflation, Mistry states

(Adds analyst comments, 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, however costs are anticipated to stay elevated due to scheduled growth of the nation's biodiesel required, industry analysts stated.

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

Palm oil output next year in leading producer Indonesia is anticipated to recover by 1.5 million metric lots compared with an approximated 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 company Oil World, said he expects Indonesia's palm oil production to increase by as much as 2 million tons next year after a 2.5 million load drop in 2024.

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

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

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

'FRIGHTENING' PRICE SURGE

The price rise in palm oil in the past 7 weeks has actually been "frightening" for buyers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million lots will be required for B40 application, eroding export supply.

The present palm oil premium has actually currently triggered palm to lose market share against other oils, Mielke included.

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

Mielke and Mistry advised Indonesia to

consider postponing

B40 implementation on issue about its influence on food customers.

Meanwhile, Mistry anticipated leading palm oil importer India to withdraw its

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