Indonesia plans to implement B40 in January

Because case, costs might rally 10%-15% in Jan-March, Mielke states

B40 will require additional 3 mln tons feedstock, GAPKI says

Malaysia palm oil benchmark at greatest given that mid-2022

India might withdraw import tax trek amidst inflation, Mistry says

(Adds analyst comments, updates Malaysia's palm oil criteria 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, but costs are expected to remain raised due to planned growth of the country's biodiesel mandate, market analysts said.

The palm oil benchmark cost in Malaysia has risen more than 35% this year, lifted by sluggish output and Indonesia's strategy to increase the obligatory domestic biodiesel blend to 40% in January from 35% now in an effort to decrease fuel imports.

Palm oil output next year in top producer Indonesia is expected to recover by 1.5 million metric lots compared to an approximated 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 company 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 ton 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 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 decreasing," Mielke said.

'FRIGHTENING' PRICE SURGE

The price rise in palm oil in the previous seven weeks has 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 said extra feedstock of around 3 million heaps will be needed for B40 application, deteriorating export supply.

The current palm oil premium has actually currently caused palm to lose market share against other oils, Mielke included.

Malaysian palm oil rates are seen trading at around $950 to $1,050 per metric lot in 2025, McGill of Glenauk approximated.

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

"Sentiment right now is red-hot and very bullish, we need to take care," stated Dorab Mistry, director at Indian consumer goods business .

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

Mielke and Mistry advised Indonesia to

think about delaying

B40 application on concern about its influence on food consumers.

Meanwhile, Mistry anticipated top 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