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Business Recorder
09-05-2025
- Business
- Business Recorder
Palm oil higher on strong buying
JAKARTA: Malaysian palm oil futures shed losses and closed higher on Thursday, after seven straight sessions of decline and hitting their lowest since September, supported by strong buying activities from major consumers, mainly India and China. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 73 ringgit, or 1.96%, to 3,801 ringgit ($888.71) a metric ton at the close. 'The futures opened lower but quickly found some floor on the back of Indian buying and short covering after a significant decline in recent times,' said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group. India was actively buying crude palm oil, while China was making purchases of refined, bleached and deodorized (RBD) palm olein this week for delivery in May to September, said a New Delhi-based dealer with a global trade house. Stock levels in both India and China are lower than normal, and the price correction offers an opportunity to build them up at a lower level, the dealer said. Dalian's most-active soyoil contract fell 0.13%, while its palm oil contract shed 0.2%. Soyoil prices on the Chicago Board of Trade were up 1.01%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market. Malaysian palm oil futures are likely to extend their decline and trade near a two-year low of 3,500 ringgit from June to November as recovery in production leads to a stock build, industry analyst Dorab Mistry said on Wednesday. Oil prices held steady on Thursday, supported by hopes of a breakthrough in looming trade talks between the US and China, the world's two largest oil consumers. The ringgit, palm's currency of trade, weakened 0.99% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Business Recorder
08-05-2025
- Business
- Business Recorder
Palm prices decline limited by Indian buying, short covering
JAKARTA: Malaysian palm oil futures fell on Thursday, continuing their decline for an eighth session and hitting their lowest since September, although strong Indian buying and short covering helped erase some early losses. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange lost 1 ringgit, or 0.03%, to 3,727 ringgit ($874.27) a metric ton by the midday break. 'The futures opened lower but quickly found some floor on the back of Indian buying and short covering after a significant decline in recent times,' said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group. India has been at the forefront to buy palm oil due to its lucrative prices in comparison to rival oils, mainly soyoil, he added. Dalian's most-active soyoil contract fell 0.13%, while its palm oil contract shed 0.63%. Soyoil prices on the Chicago Board of Trade were up 0.49%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market. Malaysian palm oil futures are likely to extend their decline and trade near a two-year low of 3,500 ringgit from June to November as recovery in production leads to a stock build, industry analyst Dorab Mistry said on Wednesday. Malaysian palm oil futures slip Oil rose on the day, supported by hopes of a breakthrough in looming US-China trade talks. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm's currency of trade, weakened 0.71% against the US dollar, making the commodity cheaper for buyers holding foreign currencies. Palm oil may test support at 3,702 ringgit, a break below which could open the way towards the 3,638-3,662 ringgit range, according to Reuters' technical analyst Wang Tao.
The Star
07-05-2025
- Business
- The Star
Palm oil prices to hit 2-year low at RM3,500 per tonne in June-November, analyst Mistry says
MUMBAI: Malaysian palm oil futures are likely to extend their decline and trade near a two-year low of RM3,500 per metric ton from June to November as recovery in production leads to a stock build, industry analyst Dorab Mistry said on Wednesday. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange lost 38 ringgit, or 1%, to 3,754 ringgit a metric ton by the midday break. They hit a more than two-year high of 5,202 ringgit in November. "Palm oil stock-build has commenced. Supplies look plentiful especially as production picks up from now," Mistry told an industry conference in Dubai. Palm oil production usually rises in top two producers, Indonesia and Malaysia, in the second half of the year. Palm oil's premium over rival soyoil in recent months led to a loss of market share. However, palm oil has now become slightly competitive and must maintain this competitiveness to recover its market share, he said, referring to the recent fall in prices. In India, a top palm oil importer, the share of palm oil in the country's vegetable oil imports fell to 43% during November to March, compared to 61% a year ago, according to data compiled by industry body Solvent Extractors' Association of India. U.S. soyoil futures are expected to remain strong due to rising demand from the local biofuel industry, following Indonesia's restriction on exports of used cooking oil and palm oil mill effluent, which were previously used for biofuels, Mistry said. India's vegetable oil imports in 2025 are likely to fall from a year ago as the crushing of oilseeds, especially rapeseed, gains momentum due to export demand for rapeseed meal, he said. China has been raising Indian rapeseed meal purchases after Chinese authorities imposed a 100% retaliatory tariff on Canadian imports. - Reuters
South China Morning Post
10-03-2025
- Business
- South China Morning Post
Age of cheap palm oil ends amid Indonesia's biofuel push: ‘those days are gone'
Prices of cooking oil could be buoyed up for years by stagnating production and a biodiesel push in top producer Indonesia that are making traditionally cheap palm oil costlier, eliminating an advantage that also curbed prices of rival oils. Advertisement Used in everything from cakes and frying fats to cosmetics and cleaning products, palm oil makes up more than half of global vegetable oil shipments and is especially popular among consumers in emerging markets, led by India After decades of cheap palm oil, thanks to booming output and a battle for market share, output is slowing and Indonesia is using more to make biodiesel, respected industry analyst Dorab Mistry said. 'Those days of US$400-per-tonne discounts are gone,' added Mistry, a director of Indian consumer goods company Godrej International. 'Palm oil won't be that cheap again as long as Indonesia keeps prioritising biodiesel.' A worker fills a vehicle at a petrol station in Jakarta. Indonesia has increased the mandatory mix of palm oil in its biodiesel. Photo: Reuters Indonesia increased the mandatory mix of palm oil in biodiesel to 40 per cent this year, and is studying moving to 50 per cent in 2026, as well as a 3 per cent blend for jet fuel next year, as it seeks to curb fuel imports.
Reuters
09-03-2025
- Business
- Reuters
The end of cheap palm oil? Output stalls as biodiesel demand surges
KUALA LUMPUR/JAKARTA, March 10 (Reuters) - Prices of cooking oil could be buoyed up for years by stagnating production and a biodiesel push in top producer Indonesia that are making traditionally cheap palm oil costlier, eliminating an advantage that also curbed prices of rival oils. Used in everything from cakes and frying fats to cosmetics and cleaning products, palm oil makes up more than half of global vegetable oil shipments and is especially popular among consumers in emerging markets, led by India. After decades of cheap palm oil, thanks to booming output and a battle for market share, output is slowing and Indonesia is using more to make biodiesel, respected industry analyst Dorab Mistry said. "Those days of $400-per-ton discounts are gone," added Mistry, a director of Indian consumer goods company Godrej International. "Palm oil won't be that cheap again as long as Indonesia keeps prioritising biodiesel." Indonesia increased the mandatory mix of palm oil in biodiesel to 40% this year, and is studying moving to 50% in 2026, as well as a 3% blend for jet fuel next year, as it seeks to curb fuel imports. The biodiesel push will reduce Indonesia's exports to just 20 million metric tons in 2030, down a third from 29.5 million in 2024, estimates Eddy Martono, chairman of the southeast Asian nation's largest palm oil association, GAPKI. Jakarta's biodiesel mandate, coupled with lower production because of floods in neighbouring Malaysia, has already lifted palm oil prices above rival soyoil, prompting buyers to cut purchases. In India, the largest buyer of vegetable oils, crude palm oil (CPO) has commanded a premium over crude soybean oil for the past six months, sometimes exceeding $100 per ton. As recently as late 2022, palm oil traded at discounts of more than $400. Indians were paying $1,185 a ton for crude palm oil last week, up from less than $500 in 2019. Higher vegetable oil prices could complicate governments' efforts to rein in inflation, whether in palm oil-reliant nations or those dependent on rival soybean, sunflower, and rapeseed oils. STUNTED GROWTH Palm oil production, dominated by Indonesia and Malaysia, nearly doubled every decade from 1980 to 2020, fuelling criticism over deforestation to add plantations. During that time, average annual production growth of more than 7% was roughly in line with demand. But Malaysia's palm oil production stagnated more than a decade ago because of lack of space for new plantations and slow replanting, while deforestation concerns have slowed growth in Indonesia. Even in Indonesia, replanting by smallholders, who generate 40% of its supply, remains sluggish. As a result, global production growth has slowed to 1% annually over the past four years. In the current decade, production growth is likely to average 1.3 million tons a year, said analyst Thomas Mielke, executive director of Hamburg-based forecaster Oil World, less than half the average of 2.9 million in the decade to 2020. Production could lose even more momentum from the impact of labour shortages, ageing plantations and the spread of Ganoderma fungus, which is hurting yields, Mielke said. REPLANTING RELUCTANCE Oil palms, which start losing productivity after 20 years, need to be replaced after 25 years, with new trees taking three to four years to yield fruit, rendering land unproductive until then and making farmers reluctant to replant. Malaysia replanted 114,000 hectares (282,000 acres), or just 2% of total planted area in 2024, against a target of 4% to 5%, Plantation Minister Johari Abdul Ghani said in February. In Indonesia, slow replanting has brought lower yields amid as plantations get older, said GAPKI official Fadhil Hasan. Its yields of crude palm oil fell 11.4% to 3.42 tons per hectare in a decade. While countries from Colombia and Ecuador to Ivory Coast and Nigeria have boosted palm oil output, industry officials say growth among newer players falls short of rising demand, particularly for biofuel. Both Mistry and Mielke called for Indonesia to resume issuing new permits for palm oil plantations, a practice it halted in 2018. "If Indonesia keeps the moratorium on new planting, there will be periodic shortages and spells of very high palm oil prices," said Mistry. The restricted production that resulted would inflict higher prices on 3 billion to 4 billion consumers in the developing world, he added. Demand is already softening in key markets thanks to rising prices, and even industrial buyers are seeking alternatives, SD Guthrie International ( opens new tab CEO Shariman Alwani Mohamed Nordin told an industry conference in February. Still, palm oil consumption will keep surging, fuelled by demand from chemicals and biofuel, industry officials say. "We see huge demand increase happening for palm oil and with the limited land, we feel, there would be demand and supply imbalance," said Harish Harlani, vice-president at P&G Chemicals. Higher palm oil prices could ripple out to boost those of rival oils as demand shifts, said Sanjeev Asthana, CEO of India's Patanjali Foods Ltd ( opens new tab. "As buyers switch to soy and sunflower, their prices shoot up too," he added. "Plus, there's only so much of those oils available, so they can't completely take palm oil's place."
