Indonesia prepares to implement B40 in January

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

B40 will need additional 3 mln loads feedstock, GAPKI states

Malaysia palm oil standard at greatest because mid-2022

India may withdraw import tax trek amid inflation, Mistry states

(Adds analyst comments, updates Malaysia's palm oil benchmark cost)

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, but prices are expected to remain elevated due to planned expansion of the country's biodiesel mandate, market experts stated.

The palm oil benchmark price in Malaysia has increased more than 35% this year, raised 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 reduce fuel imports.

output next year in leading manufacturer Indonesia is anticipated to recuperate by 1.5 million metric lots compared to an approximated drop of simply over a million loads this year, Julian McGill, managing director at Glenauk Economics, told the Indonesia Palm Oil Conference on Friday.

Thomas Mielke, head of Hamburg-based research study 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 lot drop in 2024.

While Indonesia's output is forecast 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 loads in 2024.

"We would require 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 cost surge in palm oil in the previous seven weeks has actually been “frightening” for buyers, Mielke said, adding that it would rally by 10%-15% in January-March if Indonesia implements the so-called B40 policy.

The Indonesia Palm Oil Association stated additional feedstock of around 3 million lots will be required for B40 execution, wearing down export supply.

The existing palm oil premium has actually currently triggered palm to lose market share against 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 extremely bullish, we have to beware,” stated Dorab Mistry, director at Indian durable goods business Godrej International.

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

Mielke and Mistry advised Indonesia to

consider delaying

B40 application on concern about its effect on food consumers.

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

import responsibility hike

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