Indonesia prepares to execute B40 in January

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

B40 will require extra 3 mln heaps feedstock, GAPKI says

Malaysia palm oil criteria at greatest because mid-2022

India may withdraw import tax trek in the middle of inflation, Mistry states

(Adds analyst comments, updates Malaysia's palm oil standard 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 stay elevated due to organized expansion of the nation's biodiesel required, market analysts said.

The palm oil criteria cost in Malaysia has increased more than 35% this year, raised by sluggish output and Indonesia's plan to increase the necessary domestic biodiesel blend to 40% in January from 35% now in an effort to reduce fuel imports.

Palm oil output next year in top producer Indonesia is expected to recuperate by 1.5 million metric loads compared with a projected drop of just over a million heaps this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research firm Oil World, stated he anticipates Indonesia's palm oil production to increase by as much as 2 million tons next year after a 2.5 million ton drop in 2024.

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

Palm oil output in neighbouring Malaysia is expected to dip a little 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 decreasing," Mielke stated.

'FRIGHTENING' PRICE SURGE

The price surge in palm oil in the previous seven weeks has actually been "frightening" for purchasers, Mielke stated, 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 additional feedstock of around 3 million tons will be required for B40 implementation, eroding export supply.

The existing palm oil premium has already caused palm to lose market share against other oils, Mielke included.

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 considering that mid-2022.

"Sentiment today is red-hot and exceptionally bullish, we need to be cautious," stated Dorab Mistry, director at Indian durable goods business Godrej International.

He anticipated the Malaysian cost around 5,000 ringgit and above up until June 2025.

Mielke and Mistry prompted Indonesia to

consider delaying

B40 implementation on concern about its effect on food consumers.

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

import task 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)