Indonesia plans to execute B40 in January

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

B40 will need additional 3 mln heaps feedstock, GAPKI states

Malaysia palm oil criteria at greatest because mid-2022

India may withdraw import tax trek amidst inflation, Mistry says

(Adds expert remarks, updates Malaysia's palm oil benchmark cost)

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 anticipated to remain elevated due to planned growth of the country's biodiesel required, industry experts stated.

The palm oil benchmark rate in Malaysia has actually 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 leading manufacturer Indonesia is expected to recuperate by 1.5 million metric heaps compared with a projected drop of just over a million heaps this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research study 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 lot drop in 2024.

While Indonesia's output is anticipated to enhance, supply from in other places 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 lots in 2024.

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

'FRIGHTENING' PRICE SURGE

The rate surge in palm oil in the past 7 weeks has actually been "frightening" for purchasers, 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 stated additional feedstock of around 3 million heaps will be required for B40 application, eroding export supply.

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

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 highest because mid-2022.

"Sentiment right now is red-hot and extremely bullish, we need to take care," said Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry urged Indonesia to

think about postponing

B40 execution on issue about its effect on food consumers.

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

import task walking

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)