NEW DELHI: Malaysian palm oil futures settled higher for a fifth straight session on Wednesday, a day after Brazil decided to raise its mandatory biodiesel mix into diesel.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.59%, to 3,771 ringgit ($809.92). It had risen 0.3% on Tuesday.
Brazil’s energy policy council CNPE on Tuesday decided to raise the country’s mandatory biodiesel mix into diesel from early next year, bringing forward previously set blending targets.
The move could cut Brazil’s soyoil exports and that would raise demand for palm oil, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Prices were supported by the announcement that Argentina would seek to hike export taxes for soybean oil and meal.
Palm oil rises on output concerns, lower inventories
Palm oil and soyoil compete for a part of the global market share.
Malaysia’s palm oil stocks at the end of November fell for the first time in seven months as production slumped more than exports, data from the industry regulator showed last week.
Indonesia, the world’s biggest palm oil producer, exported 3 million metric tons of palm oil products in October, down 31% from last year, data from the Indonesian Palm Oil Association (GAPKI) showed on Tuesday.
Soyoil futures on the Chicago Board of Trade were down 0.36%.
India’s palm oil imports in November jumped to a near three-month high, up nearly 23% from October as refiners preferred the tropical oil over rival soyoil and sunflower oil due to steep discounts, a leading trade body said.
Palm oil still targets a range of 3,813-3,835 ringgit per metric ton, as it has broken a resistance zone of 3,775-3,781 ringgit.
Global oil benchmark Brent topped $80 a barrel on Wednesday amid jitters over global trade disruption and geopolitical tensions in the Middle East following attacks on ships by Yemen’s Iran-aligned Houthi forces in the Red Sea.
Crude oil’s prices affect palm oil, as it is an option for biodiesel feedstock.
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