Wednesday, 18 March 2015 01:57
PARIS: Palm oil on the European vegetable oils market fell further on Tuesday due to Malaysian palm oil futures sliding to seven-week lows on worries about weak demand and doubts over Indonesia’s ambitious biodiesel mandate.
Palm oil was offered between $ 10 and $ 12 a tonne down from Monday after Malaysian palm oil futures closed 2.6 percent lower as investors and traders unwound long positions.
“Palmoil is being hit by a lack of demand,” a European trader said.
There are increasing doubts that Indonesia will be able to fulfil its ambitious biodiesel mandate as the country faces logistical and infrastructure problems, and weak crude oil prices are also making blending palm-biodiesel unprofitable.
Indonesia has said it may give tax breaks to support new biodiesel mandates, after earlier raising the minimum bio content in diesel fuel to 15 percent and ramping up biodiesel subsidies to protect its biofuel industry.
RBD palm olein for July/September shipment last traded at $ 580.00 per tonne, fob Malaysia, down $ 15 from final business on Monday. Coconut oil and palmkernel oil sellers also cut offers while EU rapeseed oil and soyoil prices were little changed.
Oil prices were under pressure for a fourth straight day on Tuesday, with Brent crude falling below $ 53 a barrel, on expectations of a 10th week of record builds in US crude, although a weaker dollar limited the market’s downside.
In competing vegetable oil markets, the most active May soybean oil contract on the Chicago Board of Trade lost 0.7 percent.
Copyright Reuters, 2015