VEGOILS-Palm extends losses as Indonesia scraps B50 biodiesel plan
Malaysian palm futures reversed gains earlier to close lower?on Wednesday for the second consecutive session, after Indonesia canceled plans to implement its B50 biodiesel program this year. However, signs of improved export?demand from India and China limited a decline.
The benchmark contract for palm oil delivery in March on the Bursa Derivatives exchange fell 21 ringgit or 0.52% to 4,043 Ringgit ($996.55) per metric ton.
Paramalingam Supramaniam is the director of Selangor brokerage Pelindung Bestari.
Supramaniam said that January exports are gaining momentum, with positive figures for the first 10 of the month and expectations that "the first 15 days" will also be positive.
He said that India and China have shown some interest in the last two days.
According to cargo surveyors, exports of Malaysian palm oil products between January 1-10 increased by 17.7% to 29.2% compared with a month ago. On Thursday, cargo surveyors will release their estimates of exports for the period January 1-15.
Officials from the Indonesian government said that they have scrapped plans to make B50 a mandatory grade of palm-oil-based diesel in this year. They will instead stick with B40 due to concerns about funding and technical issues. This has eased fears over the strain on global palm oil supply.
Dalian's palm oil contract, which is the most active contract, fell by 0.55%. Chicago Board of Trade soyoil prices were up by 0.68%.
Palm?oil monitors the price changes of competing edible oils as it competes to gain a share in the global market for vegetable oils.
The palm ringgit's currency has strengthened by 0.22% against the dollar. This makes the product slightly more expensive for foreign currency buyers.
Oil prices increased for the fifth straight session as a result of fears that Iranian supplies could be disrupted due to civil unrest in Iran and U.S.-Iran threats.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
(source: Reuters)
