Palm slips as Indonesia Biodiesel Allocation Uncertainty Continues
Malaysian palm oil futures declined on Thursday as the market was pressured by the uncertainty surrounding Indonesia's biodiesel allocation mandate.
The benchmark 'palm oil contract' for a September delivery on Bursa Malaysia derivatives Exchange fell 15 ringgit or 0.33% to 4,594 Ringgit ($1,127.64).
Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, stated that the lack of clarity regarding Indonesia's B50 allocation of biodiesel has slowed down?the upward trend of palm oil.
The allocations for subsidised and non-subsidised participants, and the volumes involved are key factors that will determine the "additional demand" of palm oil from the B50 program.
Bagani said that a surge in energy prices linked to renewed tensions between the Middle East, and palm oil interest from India and China last week, helped cushion losses.
Brent and WTI crude oil futures reached their highest levels since June 22 after the U.S. began to launch strikes against Iran on Wednesday.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Dalian's most active?soyoil contracts fell 0.01% while palm oil contract gained 0.11%. Prices of soyoil on the Chicago Board of Trade rose by 0.23%.
Palm oil tracks the price changes of competing edible oils as it competes to gain a share of?the global vegetable oils market.
The value of the ringgit (the currency used by palm to trade) against the U.S. Dollar remained unchanged.
(source: Reuters)
