Malaysian palm oil futures closed lower on Thursday and fell for the fifth consecutive session as they were dragged down by uncertainty over Indonesian and U.S. biofuel policies.
Analysts said crude palm oil prices continued to fall from Wednesday as sentiment in the global vegetable oil market changed this week, in addition to higher vegetable oil prices leading to uncertainty over Indonesian and US biofuel policies, which have led to increased subsidies for their respective projects.
Indonesia’s chief economy minister said the country will increase its gross palm oil export fee to 10 per cent from the current 7.5 per cent to subsidise biodiesel projects. Indonesia plans to increase the mandatory blending rate for palm oil-based biodiesel from 35% to 40%, or B40, on 1 January 2025, which means palm oil demand is expected to rise by nearly 3 million tonnes for the year if Indonesia rolls out B40 as expected.
Final Malaysian March palm oil closed down 0.38 per cent to 4,512 ringgit per tonne, while Dalian soybean oil fell 3 .48 per cent and palm oil 3 .83 per cent, and Chicago soybean oil rose 1 .01 per cent.