JAKARTA: Malaysian palm oil futures climbed for a second straight session on Tuesday, supported by higher rival edible oils and Indonesia’s biodiesel programme, though expectations of higher production limited gains.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 63 ringgit, or 1.44 percent higher at 4,561 ringgit (USD1,155.27) per metric ton.
The contract gained as much as 2.45 percent earlier in the session, touching its highest level in over a week, before paring back some of the gains.
The contract was supported by stronger rival Dalian oils as market participants awaited potential US-Iran peace talks, and the progress in Indonesia’s road test in preparation for a higher content of palm oil in biodiesel, a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract rose 1.90 percent, while its palm oil contract added 3.33 percent. Soyoil prices on the Chicago Board of Trade were up 0.62 percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The world’s top palm oil exporter Indonesia plans to raise its mandatory mix of palm oil-based fuel in biodiesel to 50 percent starting July 1, from current 40 percent, which likely will reduce export supply of the vegetable oil.
Indonesia on Tuesday conducted road tests for the higher blend and said it is on track for the scheduled implementation.
Meanwhile, Fitch Group’s BMI in a report on Tuesday said it maintains its palm oil annual price forecast this year at 4,300 ringgit per ton, with the near-term price expected to be largely determined by developments in the Middle East conflict.
“We expect front-month Bursa Malaysia-listed palm oil prices to ease from current levels toward 4,200 ringgit per tonne through Q2 2026 under our base case conflict scenario, as the ceasefire holds, energy prices retreat and seasonal production in Malaysia and Indonesia ramps up,” it said in a report.
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