Palm slips as Indonesia biodiesel allocation uncertainty continues

KUALA LUMPUR: Malaysian palm oil futures edged lower on Thursday, as continued uncertainty over Indonesia’s biodiesel mandate allocation pressured the market. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange shed 15 ringgit, or 0.33%, to 4,594 ringgit ($1,127.64) a metric ton at the close. The continued lack of clarity over Indonesia’s B50 biodiesel allocation has stalled the upward momentum of palm oil, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group. Traders are awaiting details on the allocations for subsidised and unsubsidised participants and the total volumes involved, key factors in determining the additional palm oil demand from the B50 programme. A surge in energy prices linked to renewed tensions in the Middle East and some palm oil buying interest from India and China this week helped cushion the losses, Bagani said. Brent and WTI crude futures hit their highest levels since June 22 on Wednesday after the U.S. military began launching strikes on Iran. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Dalian’s most-active soyoil contract fell 0.01%, while its palm oil contract added 0.11%. Soyoil prices on the Chicago Board of Trade gained 0.23%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. The ringgit, palm’s currency of trade, remained unchanged against the U.S. dollar.