Palm futures reach 15-month high on Indonesian biodiesel plans and crude rally
Malaysian palm oil futures reached a 15-month-high on Monday. This was largely due to expectations that Indonesia will continue its biodiesel-based palm-oil programme. Rising crude oil prices also added further support.
The benchmark palm oil contract on the Bursa Derivatives Exchange for June delivery was up 141 Ringgit or 3.04% at 4,772 Ringgit ($1,185.30), the highest price since December 13, 2020.
Crude palm oil soared over 4,700 ringgit after news that Indonesia would soon implement the B50 Biodiesel Programme amid rising crude oil costs, said David Ng, a proprietary trading at Kuala Lumpur's Iceberg X Sdn Bhd.
Indonesian President Prabowo Subito announced during an official visit to Japan that his country would continue its B50 Biodiesel?program this year.
The trader said, "We are seeing prices supported above 4,700 Ringgit and face fresh?resistance? at 4,850 Ringgit."
On rival markets, Dalian’s palm oil contract gained 2.84%, while the most active soyoil contract in Dalian rose by 0.67%. Chicago Board of Trade soyoil prices rose 1.96%.
As palm oil competes to gain a share in the global vegetable oils market, it tracks the price changes of competing edible oils.
Brent oil prices continued to rise on Monday. Brent is set to reach a new monthly record after Yemeni Houthis launched the first attacks?on Israel. This increased the U.S. and Israel war against Iran.
Palm oil is a better option as a biodiesel feedstock because of the stronger crude oil futures.
The palm ringgit's currency also fell by 0.35% in relation to the dollar. This made the commodity more affordable for foreign currency buyers.
According to cargo?surveyors, exports of Malaysian products containing palm oil for the period March 1-25 increased between 38.4% and 50% month-on-month. The full-month March estimates are due on Tuesday.
India's market regulator also extended the suspension of derivatives trade in seven major agricultural commodities, including crude Palm Oil, until March-end next to year in order to control prices.
(source: Reuters)
