Indonesia plans to execute B40 in January

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

B40 will require extra 3 mln loads feedstock, GAPKI states

Malaysia palm oil criteria at highest considering that mid-2022

India may withdraw import tax hike amid inflation, Mistry says

(Adds analyst remarks, updates Malaysia's palm oil standard rate)

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 prices are expected to stay raised due to planned expansion of the country's biodiesel required, industry analysts said.

The palm oil benchmark rate in Malaysia has actually risen more than 35% this year, raised by sluggish output and Indonesia's strategy to increase the compulsory 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 anticipated to recover by 1.5 million metric lots compared with a projected drop of just 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 firm Oil World, stated he expects Indonesia's palm oil production to increase by as much as 2 million lots next year after a 2.5 million ton drop in 2024.

While Indonesia's output is forecast 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 approximated 1 million loads in 2024.

"We would require a healing in palm in 2025 since combined exports of soya, sunflower and rapeseed oils are decreasing," Mielke said.

'FRIGHTENING' PRICE SURGE

The rate surge in palm oil in the past 7 weeks has been "frightening" for buyers, 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 stated additional feedstock of around 3 million tons will be required for B40 application, deteriorating export supply.

The existing palm oil premium has actually already triggered palm to lose market share versus other oils, Mielke added.

Malaysian palm oil costs 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 today is red-hot and incredibly bullish, we have to be cautious," said Dorab Mistry, director at Indian durable goods company Godrej International.

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

Mielke and Mistry prompted Indonesia to

think about postponing

B40 application on concern about its impact on food customers.

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

import duty 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; Editing by John Mair, Jane Merriman and Daren Butler)