Palm rises for a second session on Indonesia’s levy hike plan

JAKARTA: Malaysian palm oil futures rose for a second consecutive session on Thursday, supported by Indonesia’s plan to hike palm oil export levy, while pressure from expectations of rising stocks limited gains.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 9 ringgit, or 0.22%, to 4,042 ringgit ($995.57)a metric ton at closing.

Indonesia will likely increase its palm oil export levy to support the country’s biodiesel mandate, energy ministry official Eniya Listiani Dewi told reporters on Thursday, citing tightening funds.

The plan is bullish for Malaysian palm futures, a Kuala Lumpur-based trader said, but market participants are “still waiting to see how much Indonesia going to hike”.

The market is also anticipating a smaller decline in December output which could push Malaysia’s inventories above 3 million tons, the trader added, citing Malaysian Palm Oil Association estimate of a 4.64% decline in December output, smaller than market participants’ expectations of a 9% drop.

Indonesia consumed 14.2 million kilolitres of palm-based biodiesel in 2025, a 7.6% increase compared to the previous year, energy ministry data showed, as the country implemented a 40% biodiesel blending mandate, known as B40.

Dalian’s most-active soyoil contract rose 0.2%, while its palm oil contract was up 1.13%. Soyoil prices on the Chicago Board of Trade gained 0.43%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Indonesian President Prabowo Subianto said on Wednesday that his government might seize 4 million to 5 million hectares (12 million acres) of palm oil plantations this year, on top of the 4.1 million hectares seized last year.

Analysts said this, in combination with Indonesia’s ambitious biodiesel plans, could put more upward pressure on global palm oil prices.

Palm oil may revisit its December 30 high of 4,102 ringgit per ton, driven by a wave c, Reuters technical analyst Wang Tao said.