Indonesia plans to implement B40 in January

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

B40 will need additional 3 mln heaps feedstock, GAPKI states

Malaysia palm oil benchmark at greatest since mid-2022

India might withdraw import tax hike amidst inflation, Mistry states

(Adds analyst remarks, updates Malaysia's palm oil standard 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, but rates are expected to stay raised due to planned growth of the nation's biodiesel mandate, industry analysts said.

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

Palm oil output next year in leading producer Indonesia is expected to recover by 1.5 million metric heaps compared to an approximated 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 Hamburg-based research company 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 heap drop in 2024.

While Indonesia's output is anticipated to enhance, supply from elsewhere and of other vegetable oils is seen tightening up.

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

"We would need a healing in palm in 2025 due to the fact that combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.

'FRIGHTENING' PRICE SURGE

The rate rise in palm oil in the past seven weeks has actually been "frightening" for buyers, Mielke stated, 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 additional feedstock of around 3 million heaps will be required for B40 implementation, wearing down export supply.

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

Malaysian palm oil prices are seen trading at around $950 to $1,050 per metric lot 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 right now is red-hot and very bullish, we need to be mindful," stated Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry urged Indonesia to

think about delaying

B40 execution on concern about its influence on food customers.

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

import responsibility 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)