Palm oil settles higher, despite disappointing biodiesel goals and weaker competitors oils

Malaysian palm futures'reversed their course and settled slightly higher?on Wednesday. They did so despite a slower than expected expansion of the country's 'biodiesel mandate, as well as a weakness in rival oils.

The benchmark contract for palm oil delivery in June on the Bursa Derivatives exchange gained 8 ringgit or 0.18% to $4474 ringgit ($1,132.66), a metric tonne, at the close. The contract fell by 1.95% during the previous session.

Anilkumar bagani, head of commodity research at Sunvin Group in Mumbai, said that the price of crude palm oil futures fell due to the ease on the vegetable oil market, especially soybean oil.

"Malaysia's stepped-up increase in its biodiesel mandate, first moving to B12, and then to B15, has failed to inspire confidence on the market, as traders expected a move up to B20 or even higher," he said.

Malaysia has pledged to increase the use of biodiesel in order to cope with fuel shortages as its economy is under increased strain due to?the Middle East Crisis.

Dalian's palm oil contract dropped 0.65%, while the most active soyoil contract in Dalian fell by 0.41%. Chicago Board of Trade Soyoil prices were up by?0.8%.

Palm oil tracks the price movement of rival edible oils as it competes to gain a share in?the global market for vegetable oils.

Exports of Malaysian Palm Oil Products for April 1-15 dropped between 34.2% and 34.7% from the previous month, according to cargo surveyors.

The palm ringgit's currency of trade has weakened by 0.03% compared to the dollar. This makes the commodity slightly more affordable for buyers who hold foreign currencies. ($1 = 3.9500 ringgit)

(source: Reuters)