Indonesia prepares to execute B40 in January

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

B40 will need additional 3 mln lots feedstock, GAPKI says

Malaysia palm oil standard at greatest considering that mid-2022

India might withdraw import tax hike in the middle of inflation, Mistry states

(Adds expert 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 anticipated drop this year, however costs are expected to stay elevated due to planned growth of the nation's biodiesel required, market analysts said.

The palm oil standard price in Malaysia has actually risen more than 35% this year, raised by slow output and Indonesia's strategy to increase the obligatory domestic biodiesel mix 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 recuperate by 1.5 million metric heaps compared to a projected drop of just over a million loads this year, Julian McGill, managing director at Glenauk Economics, informed the Indonesia Palm Oil Conference on Friday.

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

While Indonesia's output is forecast to enhance, provide from somewhere else and of other veggie oils is seen tightening up.

Palm oil output in neighbouring Malaysia is expected to dip somewhat next year after increasing by an approximated 1 million loads in 2024.

"We would need a recovery 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 previous 7 weeks has been "frightening" for buyers, Mielke said, including that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association said additional feedstock of around 3 million tons will be needed for B40 application, wearing down 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 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 today is red-hot and exceptionally bullish, we have to be cautious," said Dorab Mistry, director at Indian customer goods company Godrej International.

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

Mielke and Mistry prompted Indonesia to

consider delaying

B40 execution on concern about its effect on food consumers.

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)