JAKARTA: Malaysian palm oil futures rebounded on Wednesday after the world’s top palm oil maker Indonesia issued a regulation stating it would start requiring export permits for all palm oil products, raising fears of global supply disruption.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 2.7% to close at 5,596 ringgit ($1,337.80) per tonne on Wednesday, its best day since Jan. 28.
It fell as much as 2.9% earlier in the session weighed by weakness in rival oils.
The rebound was likely a reaction to Indonesia’s latest restrictive policy for their palm oil exports, a palm trader in Kuala Lumpur said.
Indonesia, starting Feb. 15, would require export permits for all palm oil products. The rule previously only applied to crude palm oil, olein, used cooking oil and residues.
To obtain the shipments permits, companies must sell 20% of their planned CPO and/or RBDPO exports to the domestic market with a capped price as Indonesia seeks to lower prices of cooking oil at home.
On China’s Dalian exchange, rival oils cut some of their earlier losses, with the most-active soyoil contract closing 1.34% lower, while the palm oil contract for May delivery lost 2.02%. They each fell more than 3% earlier in the session.
Soyoil prices on the Chicago Board of Trade gained 0.87%. Palm oil and its rival oils affect each other as they compete for a share in the global vegetable oils market.
Meanwhile, traders are also awaiting the Malaysia Palm Oil Board’s January data, due on Thursday, to assess the country’s production and exports situation.
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