- The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed up 61 ringgit, or 2.92%, at 2,150 ringgit ($492.44) per tonne, the highest since April 21.
- Indonesia, the world’s biggest palm producer, is set to distribute $2.78 trillion rupiah ($187 million) for its B30 biodiesel programme and increase its palm oil export levy by $5 per tonne starting this month.
- Palm oil climbed 2.95% in the previous session to clock in a 3.5% weekly rise after Malaysia, the world’s second-largest producer, slashed its crude palm oil export duty to zero for June.
KUALA LUMPUR: Malaysian palm oil futures rallied nearly 3% on Monday, helped by Indonesia’s plan to maintain an ambitious biodiesel programme and signs of growing demand on the back of more countries easing coronavirus restrictions.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed up 61 ringgit, or 2.92%, at 2,150 ringgit ($492.44) per tonne, the highest since April 21.
Indonesia, the world’s biggest palm producer, is set to distribute $2.78 trillion rupiah ($187 million) for its B30 biodiesel programme and increase its palm oil export levy by $5 per tonne starting this month.
The market has been concerned about a disruption to the biodiesel programme after a historic crash in oil prices this year widened the cost difference between standard diesel fuel and the fatty acid methyl ester (FAME), making biodiesel more expensive to be subsidised.
Malaysia has also delayed its nationwide adoption of the B20 biodiesel programme due to a two-month partial lockdown.
Palm oil climbed 2.95% in the previous session to clock in a 3.5% weekly rise after Malaysia, the world’s second-largest producer, slashed its crude palm oil export duty to zero for June.
“It has enabled sellers to offer the commodity at reasonable discount over Indonesian offers,” said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.
“Malaysia’s May 1-15 palm oil export shows a steady increase as the palm oil prices are attracting fresh demand due to lucrative levels and ease in coronavirus-related lockdown in some countries,” he added.
Malaysia’s palm oil exports in May 1-15 rose between 6% and 7% from the previous month, cargo surveyors said on Friday.
Malaysia is set to meet petroleum companies on Tuesday to discuss the postponement of its B20 biodiesel mandate, the Commodities Ministry said on Monday.
Oil prices climbed by more than $1 a barrel, with benchmark Brent hitting a one-month high and US crude topping $30 supported by optimism about the re-opening of economies and output cuts by major producers.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract rose 0.71% and its palm oil contract jumped 2.16%. Soyoil prices on the Chicago Board of Trade were also trading up 1.17%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
