Indonesia prepares to execute B40 in January

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

B40 will require extra 3 mln heaps feedstock, GAPKI says

Malaysia palm oil criteria at highest since mid-2022

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

(Adds analyst remarks, updates Malaysia's palm oil benchmark price)

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 rates are expected to remain raised due to planned expansion of the nation's biodiesel mandate, industry analysts stated.

The palm oil benchmark cost in Malaysia has increased more than 35% this year, lifted 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 recuperate by 1.5 million metric lots compared with an estimated drop of simply over a million heaps this year, Julian McGill, handling 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 loads next year after a 2.5 million ton drop in 2024.

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

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

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

'FRIGHTENING' PRICE SURGE

The rate rise in palm oil in the previous seven weeks has been "frightening" for purchasers, Mielke said, adding that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.

The Indonesia Palm Oil Association stated extra feedstock of around 3 million loads will be required for B40 application, eroding export supply.

The present palm oil premium has 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 load in 2025, McGill of Glenauk estimated.

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

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

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

Mielke and Mistry prompted Indonesia to

consider postponing

B40 execution on issue about its influence on food consumers.

Meanwhile, Mistry expected top 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)