Indonesia prepares to execute B40 in January

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

B40 will require additional 3 mln tons feedstock, GAPKI states

Malaysia palm oil standard at greatest since mid-2022

India may withdraw import tax trek amid inflation, Mistry states

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

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 expected to remain elevated due to organized growth of the country's biodiesel mandate, market analysts stated.

The palm oil standard cost in Malaysia has increased more than 35% this year, raised by slow output and Indonesia's strategy to increase the necessary 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 loads compared with an approximated 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, stated he expects Indonesia's palm oil production to increase by as much as 2 million tons next year after a 2.5 million lot drop in 2024.

While Indonesia's output is anticipated to improve, provide from somewhere else and of other vegetable oils is seen tightening up.

Palm oil output in neighbouring Malaysia is anticipated to dip slightly next year after increasing by an estimated 1 million loads in 2024.

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

'FRIGHTENING' PRICE SURGE

The rate surge in palm oil in the previous 7 weeks has been "frightening" for buyers, 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 needed for B40 execution, eroding export supply.

The current palm oil premium has actually already caused palm to lose market share against 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 approximated.

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

"Sentiment today is red-hot and exceptionally bullish, we have to take care," said Dorab Mistry, director at Indian consumer goods company Godrej International.

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

Mielke and Mistry urged Indonesia to

think about postponing

B40 execution on concern about its effect on food customers.

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

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