Palm reaches four-week high in Malaysia's biodiesel plan
After surging almost 2% on a Tuesday, Malaysian palm-oil futures have risen to their highest level in four weeks. This is due to 'optimism about Malaysia's plans for biodiesel.
The benchmark palm oil contract for July delivery at the Bursa Derivatives Exchange in Malaysia gained 88 Ringgit or 1.9% to 4,710 Ringgit ($1,189.39), the highest close since April 7.
Malaysia will start producing biodiesel in June with a palm oil blend of 15%, or B15. This is to lower diesel prices.
Paramalingam Supramaniam is the director of brokerage Pelindung Bestari. According to him, the market believes that Malaysia will need close to 1,5 million metric tonnes of crude palm oil annually for a successful implementation of?B15.
Supramaniam, a Malaysian palm oil association, said that traders were waiting for the full-month production numbers for April. These figures are expected to be an indicator for output trends in the second quarter.
The Chicago Board of Trade reported a 0.41% increase in soyoil. The Dalian Commodity Exchange will resume trading after a holiday on May 6th.
Palm oil monitors the price changes of other edible oils as it competes for a share of the global vegetable oil market.
Brent crude futures declined but held at $114 per barrel following new hostilities in Middle East. Investors also monitored the developments in the U.S. - Israel conflict with Iran.
Palm oil is less attractive as a biodiesel feedstock because crude oil futures are weaker.
The palm ringgit's currency, the?ringgit, has weakened by 0.25% against dollars, making it slightly cheaper for foreign currency buyers. ($1 = 3.9600 ringgit)
(source: Reuters)
