JAKARTA: Malaysian palm oil futures rose on Friday and booked a 3.80percent weekly gain, supported by expectations that Indonesia’s planned B50 mandate would boost domestic consumption and tighten global supplies.
Top palm oil producer Indonesia is on track to launch its B50 biodiesel mandate - blending 50percent palm-oil-based biodiesel with 50percent conventional diesel - on July 1, Energy Minister Bahlil Lahadalia said on Thursday, after fuel tests showed positive results. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was up 72 ringgit, or 1.57percent, at 4,645 ringgit (USD1,123.61) a metric ton at the close.
The Dalian and Chicago markets were closed for public holidays. “The futures are seen trading sharply higher today on optimism over confirmation of Indonesia’s B50 biodiesel mandate, expectations of an official release of B50 allocations soon and a possible bottoming of gas oil futures after a relentless fall recently,” said Anilkumar Bagani, the head of research at the Mumbai-based vegetable oil broker Sunvin Group.
Brent crude steadied on Friday but remained set for a more than 8percent weekly decline as traders weighed fading US-Iran truce prospects after talks were called off and Israel escalated attacks in Lebanon. Lower crude oil futures make palm a less attractive option for biodiesel feedstock.
Malaysian crude palm oil is expected to trade between 4,400 ringgit and 4,650 ringgit (USD1,070 and USD1,130) per metric ton in July, the Malaysian Palm Oil Council said on Friday.
The ringgit, palm’s currency of trade, weakened 0.41percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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