Key Takeaways
- Malaysian palm oil futures fell on Wednesday, closing at 4,569 ringgit per metric ton.
- Indonesia will subsidise diesel fuel for midsize fishing vessels using funds from palm oil and cocoa export levies.
- Palm oil exports in May were down 25.1% year-on-year to 1.996 million metric tons.
Malaysian palm oil futures experienced a decline on Wednesday, closing at 4,569 ringgit per metric ton ($1,120.95), after two consecutive days of gains were reversed due to lack of significant market cues.
Paramalingam Supramaniam, director of the Selangor-based brokerage Pelindung Bestari, stated that the futures are trading in a range-bound manner, with no major announcements or changes in sentiment affecting the market. He added that while some traders are pricing in concerns over El Nino, overall demand remains subdued.
The global vegetable oils market continues to be influenced by the price movements of its rivals, particularly soy oil and crude oil. Dalian’s most-active soyoil contract rose 0.08%, while its palm oil contract increased by only 0.02%. Soy oil prices on the Chicago Board of Trade were up 0.69%.
Indonesia has announced plans to subsidise diesel fuel for midsize fishing vessels, using funds collected from palm oil and cocoa export levies. This move is aimed at supporting local industries but may also impact the global market dynamics of these commodities.
According to Indonesian Palm Oil Association data, Malaysia’s crude palm oil exports, including refined products, fell by 25.1% year-on-year in May, reaching 1.996 million metric tons. This decline highlights ongoing challenges faced by the industry despite efforts to maintain export levels.
Malaysia has raised its August crude palm oil reference price to a level that maintains an export duty of 10%, as shown on the Malaysian Palm Oil Board’s website. This decision is expected to influence the competitiveness of palm oil in international markets, particularly for biodiesel feedstock.
AmSpec Agri reported that exports of Malaysian palm oil products for July 1-15 increased by 4%, while Intertek Testing indicated a rise of 12.4%. These figures suggest some stability and growth within the sector despite overall market sentiment remaining cautious.
