Indonesia plans to implement B40 in January

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

B40 will require extra 3 mln heaps feedstock, GAPKI states

Malaysia palm oil criteria at highest given that mid-2022

India may withdraw import tax trek amidst inflation, Mistry states

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

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, however prices are anticipated to stay elevated due to organized expansion of the country's biodiesel mandate, industry analysts said.

The palm oil benchmark cost in Malaysia has actually increased more than 35% this year, raised by sluggish output and Indonesia's plan to increase the compulsory 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 anticipated to recover by 1.5 million metric tons compared with an estimated 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 firm Oil World, stated he anticipates 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 anticipated to enhance, provide from somewhere else and of other vegetable oils is seen tightening.

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

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

'FRIGHTENING' PRICE SURGE

The rate rise in palm oil in the past 7 weeks has actually been "frightening" for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia imposes the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million loads will be needed for B40 execution, 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 ton in 2025, McGill of Glenauk approximated.

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

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

He forecast the Malaysian price around 5,000 ringgit and above till June 2025.

Mielke and Mistry advised Indonesia to

consider postponing

B40 application on issue about its impact on food customers.

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

import duty 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)