Palm prices surge over 2% following US plans to finalise the biofuel quotas

Malaysian palm futures rose more than 2%?Friday and are on course for a second?weekly?gain. This is due to the strength of soybean oil following U.S. plans to finalise biofuels quotas. By midday, the benchmark April palm oil contract on the Bursa Derivatives exchange had risen 81 ringgit or 2.03% to 4,071 Ringgit ($1,003.95) per metric ton. The contract has risen 0.45% this week.

The market rose on news that the Trump administration will release 2026

biofuel

quotas this March, which would?generate a greater demand for biofuels made from soybean oil, said David Ng. He is a proprietary trader with Kuala Lumpur based trading?firm Iceberg X Sdn Bhd.

According to sources familiar with these plans, the U.S. will keep its 'biofuel quotas' close to their initial proposal, which would increase total biofuel blend volumes starting in 2025. However, it will drop a plan that penalised imports of renewable feedstocks and fuels. Dalian's soyoil contract, which is the most active contract in Dalian, gained 0.53% while palm oil contracts firmed up by 0.23%. Chicago Board of Trade soyoil prices rose by 0.17%.

As it vies to gain a piece of the global vegetable oil market, palm oil monitors the 'price movements' of its rival edible oils. The cargo surveyors’ estimates of Malaysian palm oils?exports from January 1-15 also helped to boost prices. They rose between 17.5% and 18.6% on a month-to-month basis. The ringgit (palm's trade currency) has weakened by 0.07% versus the dollar. This makes the commodity slightly more affordable for buyers holding foreign currencies. Oil prices remained flat as the probability of an American strike against Iran declined.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

(source: Reuters)