KUALA LUMPUR: Malaysian palm oil futures slipped on Thursday for a fifth straight session, weighed down by uncertainty over Indonesian and U.S. biofuel policies.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed down 0.38% at 4,512 ringgit ($1,002.00) a metric ton. During the session, the contract fell as much as 3% and had briefly gained 0.73%.
Crude palm oil prices extended their sell-off from Wednesday following a change in sentiments in the global vegetable oil markets this week, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin group.
“This was mostly due to the uncertainty over the Indonesia and U.S. biofuel policies amid higher vegetable oil prices, thus incurring higher subsidies for the respective programmes.”
Indonesia’s plan to expand its biodiesel mandate from Jan. 1, which could curb global palm oil supplies, looks increasingly likely to be implemented gradually, analysts said, as industry participants seek a phase-in period.
Edible oil prices tumble on US ethanol plan, record soybean supplies
A U.S. government funding bill released on Tuesday included a plan to allow year-round sales of gasoline with a higher ethanol blend, known as E15. Traders had said that higher blending of corn-based ethanol in the U.S. could reduce the demand for soybean oil used in making biodiesel.
Dalian’s most-active soyoil contract fell 3.48%, while its palm oil contract shed 3.83%. Soyoil prices on the Chicago Board of Trade rose 1.01%.
Palm oil tracks the price movements of rival edible oils as it competes for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.81% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.
Source: Brecorder
