Indonesia prepares to carry out B40 in January

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

B40 will require additional 3 mln heaps feedstock, GAPKI states

Malaysia palm oil standard at highest because mid-2022

India may withdraw import tax trek amid inflation, Mistry says

(Adds analyst remarks, updates Malaysia's palm oil standard rate)

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 rates are expected to stay elevated due to scheduled expansion of the nation's biodiesel mandate, industry analysts said.

The palm oil standard cost in Malaysia has actually risen more than 35% this year, raised by slow output and Indonesia's strategy to increase the mandatory domestic biodiesel mix to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in top manufacturer Indonesia is expected to recover by 1.5 million metric tons compared with a projected drop of simply over a million lots 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 firm Oil World, stated he expects 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 forecast to enhance, supply from in other places 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 recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are declining," Mielke stated.

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the previous 7 weeks has been "frightening" for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia enforces the so-called B40 policy.

The Indonesia Palm Oil Association said extra feedstock of around 3 million heaps will be required for B40 implementation, deteriorating export supply.

The current palm oil premium has actually currently triggered palm to lose market share versus other oils, Mielke added.

Malaysian palm oil costs are seen trading at around $950 to $1,050 per metric heap 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 incredibly bullish, we need to beware," stated Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry urged Indonesia to

think about postponing

B40 implementation on issue about its effect on food consumers.

Meanwhile, Mistry palm oil importer India to withdraw its

import duty walking

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