Malaysian palm oil down on export concerns, Indonesia’s biodiesel plans

KUALA LUMPUR: Malaysian palm oil futures settled lower on Wednesday, weighed down by export demand concerns and uncertainty over Indonesia’s biodiesel mandate.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 9 ringgit, or 0.21%, to 4,356 ringgit ($968.00) a metric ton at the close. The contract rose 0.62% in the previous session. Crude palm oil prices slipped as the market continues to grapple with export concerns, said a Kuala Lumpur-based trader. Malaysia’s palm oil export data for Jan. 1-10 is expected on Friday, following December data that showed exports declined between 2.5% and 7.8%.

“The market is also awaiting further news regarding Indonesia’s B40 biodiesel mandate,” the trader added. Indonesia’s Energy and Mineral Resources Minister signed a decree last Friday allocating 15.6 million kilolitres of biodiesel for 2025 distribution, while giving the industry until the end of next month to adapt. Dalian’s most-active soyoil contract fell 0.37%, while its palm oil contract added 0.49%. Soyoil prices on the Chicago Board of Trade (CBOT) gained 1.38%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Oil prices rose as supplies from Russia and OPEC members tightened while US crude oil stocks fell last week, market sources said, citing American Petroleum Institute figures. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened 0.33% against the US dollar, making the commodity cheaper for buyers holding foreign currencies. The European Union soybean imports in the 2024-25 season that began in July reached 6.96 million metric tons by Jan. 5, up 12% from 6.22 million tons a year earlier, data published by the European Commission showed.