JAKARTA: Malaysian palm oil futures closed lower on Thursday, triggered by a sell-off after news of Indonesia’s palm oil B40 delay caused market uncertainties.
Indonesia has yet to implement a higher mandatory blend of biodiesel planned for Jan. 1 as industry participants await the technical regulations for the rollout, causing confusion among palm oil traders.
“The news definitely gave the push for market to go down. The delay will have a significant impact,” a Kuala Lumpur-based trader said.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 2.52% to 4,336 ringgit ($968.72) a metric ton at the close, after rising about 1.8% earlier in the day.
Dalian’s most-active soyoil contract gained 0.13% while its palm oil contract flipped to a 2.33% decline. The Chicago Board of Trade soyoil is closed for the New Year holiday.
Indonesia slightly lowered its crude palm oil reference price for January to $1,059.54 a ton from $1,071.67 in December, according to a trade ministry regulation published on Tuesday.
Palm ends with more than 19% annual gain after two years of losses
Exports of Malaysian palm oil products for December fell 2.5%, according to AmSpec Agri Malaysia, while Intertek Testing Services said they fell 7.8%.
The ringgit, palm’s currency of trade, fell 0.18% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices nudged higher on Thursday, the first day of trade for 2025, as investors returning from holidays cautiously eyed a recovery in China’s economy and fuel demand following a pledge by President Xi Jinping to promote growth.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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