Palm oil prices rise for the fifth consecutive day as biodiesel and crude oil boost palm prices

The market for Malaysian palm oils futures rose on Wednesday for the fifth consecutive session, as the market was supported by the announcement of Indonesia's rollout of B50 biodiesel and the rising prices of crude oil.

By midday, the benchmark palm oil contract for?June deliveries on the Bursa Derivatives Exchange had gained 33 ringgit or 0.68% to 4,861 Ringgit ($1,204.71).

Anilkumar bagani, head of commodity research at Sunvin Group in Mumbai, said that the price of crude palm oil futures continued to rise, following confirmation of Indonesia's B50 Biodiesel Programme and the upward trend in energy prices.

Airlangga Hartarto, Indonesia's senior economic minister, said that the blend rate of palm-based biodiesel will be increased to 50% or B50 on July 1, from the current 40%.

Bagani said that "stronger Malaysian palm oil performance in March, a weaker Ringgit and higher Chinese Vegetable Oil Futures provided further support."

Bagani stated that the fresh destination demand had slowed, and India was notably missing in new purchases. This is due to high prices, and the sharp volatility of the rupee against U.S. dollars, which has prompted importers and exporters to limit their exposure.

Exports of palm oil products from Malaysia for March rose between 44.3% to 56.7% on a month-on-month basis, according to cargo surveyors.

Dalian's soyoil contract with the highest volume rose by 0.16% while palm oil contracts fell by 0.1%. Prices of soyoil on the Chicago Board of Trade fell by 0.55%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price movement of "rival edible" oils.

Brent 'futures' rose by more than 1% after a record-breaking monthly gain in March. Middle East volatility kept the markets jittery despite news that reports suggested the U.S. and Israeli war against Iran was nearing an end.

The?palm is a better option as a feedstock for biodiesel due to the stronger crude oil futures.

The dollar has strengthened by 0.35%, which makes palm slightly more expensive to buyers who hold foreign currencies. Reporting by Ashley Tang, Editing by Sumana Nandy, and Janane Vekatraman.

(source: Reuters)