Price of palm oil ended the trading session on the rise

Palm oil prices closed higher in Asia. The rise in oil prices the previous day likely supported investor sentiment, according to a research note from Kenanga Futures. Optimism fueled by data on recovering export demand released by cargo surveyors, as well as a further rise in oil prices due to the protracted conflict in the Middle East, could further support the upward trend, the company added.

Malaysian palm oil futures rose on Thursday, driven by rising prices of competing edible oils, higher crude oil prices, and expectations of stronger demand for biodiesel following Indonesia’s decision to accelerate road testing of the B50 blend.

The benchmark FCPO1 palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 42 ringgit, or 0.93%, to 4,541 ringgit (US$1,157.24) per metric tonne at the close, after reaching an intraday high of 4,628 ringgit.

“Currently, futures are driven by the oil situation; any significant rise in oil prices and oil prices in Dalian and Chicago will react to this,” a Kuala Lumpur-based trader said.

“News that Indonesia is accelerating the rollout of the B50 blend is also supporting the market,” the trader added.

The most-active soybean oil contract in Dalian rose 1.46%, while the palm oil contract rose 2.43%. The Chicago Mercantile Exchange soybean oil contract rose 0.79%.

Palm oil prices are tracking the price of competing edible oils as it competes for share in the global vegetable oil market.

Higher crude oil futures are making palm oil a more attractive biodiesel feedstock option.

Indonesia is accelerating trials of B50 biodiesel, made from 50% palm oil and 50% conventional feedstock, in case it experiences crude oil supply problems due to the Middle East conflict, the country’s deputy energy minister said on Wednesday.

Meanwhile, Malaysia raised its April reference price for crude palm oil, increasing the export duty to 9.5%, according to a notice on the Malaysian Palm Oil Council’s website published on Thursday.

India’s palm oil imports in February rose about 11% from the previous month to 847,689 metric tons, a trade body said on Thursday.

Tags: prices, palm oil