Indonesia prepares to implement B40 in January

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

B40 will need extra 3 mln heaps feedstock, GAPKI states

Malaysia palm oil criteria at greatest given that mid-2022

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

(Adds analyst comments, updates Malaysia's palm oil standard cost)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recover in 2025 after an anticipated drop this year, but prices are expected to remain raised due to scheduled expansion of the nation's biodiesel mandate, industry analysts stated.

The palm oil standard rate in Malaysia has actually risen more than 35% this year, lifted by slow output and Indonesia's plan to increase the compulsory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top producer Indonesia is anticipated to recover by 1.5 million metric lots compared to a projected drop of just 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 study firm Oil World, said he expects Indonesia's palm oil production to increase by as much as 2 million lots next year after a 2.5 million lot drop in 2024.

While Indonesia's output is anticipated to improve, supply from in other places and of other vegetable oils is seen tightening.

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

"We would need 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 been "frightening" for buyers, Mielke stated, adding that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million lots will be needed for B40 application, wearing down export supply.

The current 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 load in 2025, McGill of Glenauk estimated.

Malaysian palm oil touched 5,104 ringgit ($1,165.30) on Friday, the highest considering that mid-2022.

"Sentiment right now is red-hot and extremely bullish, we have to beware," stated Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry urged Indonesia to

think about delaying

B40 execution on concern about its effect on food customers.

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

import duty 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