Indonesia prepares to execute B40 in January

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

B40 will require extra 3 mln loads feedstock, GAPKI says

Malaysia palm oil criteria at highest given that mid-2022

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

(Adds expert remarks, updates Malaysia's palm oil criteria rate)

By Bernadette Christina

NUSA DUA, Indonesia, Nov 8 (Reuters) - Indonesia's palm oil output is forecast to recuperate in 2025 after an expected drop this year, but prices are anticipated to stay raised due to organized growth of the country's biodiesel mandate, market experts said.

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

Palm oil output next year in top producer Indonesia is expected to recuperate by 1.5 million metric tons compared with a projected drop of just over a million tons 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, said he anticipates Indonesia's palm oil production to increase by as much as 2 million tons next year after a 2.5 million lot drop in 2024.

While Indonesia's output is forecast to improve, supply from somewhere else and of other vegetable 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 need a recovery in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.

'FRIGHTENING' PRICE SURGE

The cost surge in palm oil in the previous seven weeks has actually been "frightening" for purchasers, 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 additional feedstock of around 3 million loads will be needed for B40 implementation, eroding export supply.

The existing palm oil premium has already 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 load in 2025, McGill of Glenauk approximated.

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

"Sentiment right now is red-hot and incredibly bullish, we have to beware," said Dorab Mistry, director at Indian customer items company Godrej International.

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

Mielke and Mistry advised Indonesia to

consider postponing

B40 execution on concern about its influence on food consumers.

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

import duty 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)