Indonesia prepares to execute B40 in January

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

B40 will require additional 3 mln lots feedstock, GAPKI says

Malaysia palm oil benchmark at highest since mid-2022

India might withdraw import tax trek amid inflation, Mistry states

(Adds analyst remarks, updates Malaysia's palm oil standard 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, but prices are expected to remain raised due to planned expansion of the nation's biodiesel mandate, market analysts said.

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

Palm oil output next year in leading producer Indonesia is anticipated to recover by 1.5 million metric lots compared to an estimated drop of just 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 research study firm Oil World, stated he expects 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 forecast to improve, supply from in other places and of other veggie oils is seen tightening up.

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

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

'FRIGHTENING' PRICE SURGE

The rate rise in palm oil in the past seven weeks has been "frightening" for purchasers, Mielke said, 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 extra feedstock of around 3 million loads will be required for B40 implementation, eroding export supply.

The present palm oil premium has currently caused 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 heap in 2025, McGill of Glenauk estimated.

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

"Sentiment today is red-hot and incredibly bullish, we need to take care," said Dorab Mistry, director at Indian consumer items 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 execution on issue about its influence on food customers.

Meanwhile, Mistry expected leading 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