Palm fell due to export concerns and Indonesia's biodiesel plan
Malaysian palm futures fell on Wednesday due to concerns over export demand and the uncertainty surrounding Indonesia's biodiesel mandate.
At the close, the benchmark March palm oil contract on Bursa Derivatives Exchange fell 9 ringgit or 0.21% to 4,356 Ringgit ($968.00). The contract gained 0.62% during the previous session.
A Kuala Lumpur based trader said that the price of crude palm oil has dropped as export worries continue to plague the market.
The data on palm oil exports from Malaysia for the period Jan. 1-10 will be released Friday. This follows December's data, which showed a decline between 2.5% to 7.8% in exports.
The trader said that the market was also waiting for more information regarding Indonesia's mandate on B40 biodiesel.
Indonesia's Energy and Mineral Resources minister signed a decree on Friday that allocated 15.6 million kilograms of biodiesel to be distributed in 2025. The industry has until the end next month for adaptation.
Dalian's palm oil contract, which is the most active contract in Dalian, increased by 0.49%. Chicago Board of Trade Soyoil Prices grew by 1.38%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
Market sources cited American Petroleum Institute data to say that oil prices increased as supplies from Russia, OPEC and other countries tightened. Meanwhile, U.S. crude stocks dropped last week.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency has weakened by 0.33% compared to the U.S. Dollar, making it cheaper for foreign buyers.
Data published by the European Commission revealed that the European Union soybeans imports for the 2024-25 season, which began in July, reached 6.96 millions metric tons on Jan. 5. This is up 12% compared to 6.22 million metric tons a year ago.
The EU's imports of palm oil fell 18% on an annual basis to 1,52 million tons. (1 dollar = 4.5000 ringgit). (Reporting and editing by Ashley Tang, Sumana Nady, Janane Vekatraman and Shreya Biwas).
(source: Reuters)
