CPO Futures Finish Mostly Higher On Expectation Of Tighter Supply, B50 Biodiesel Mandate
By Nurunnasihah Ahmad Rashid
KUALA LUMPUR, July 22 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives ended mostly higher on Wednesday, supported by expectations of tighter supplies, Indonesia’s B50 biodiesel mandate and the commodity’s price discount against competing edible oils.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani noted that although the market came under pressure earlier in the day following weakness in Dalian Commodity Exchange (DCE) RBD palm olein and Chicago Board of Trade (CBOT) soy oil futures, the sentiment remained underpinned by supportive fundamental factors.
He said palm oil’s discount against competing oils, the threat of El Niño and the potential for a supply squeeze amid Indonesia’s B50 biodiesel mandate continued to lend support to the market.
“The market is awaiting fresh production estimates for July 1-20 from UOB Kay Hian and the Malaysian Palm Oil Association (MPOA), after the Southern Peninsula Palm Oil Millers’ Association (SPPOMA) data showed palm oil production in the southern peninsula slipped by less than one per cent during the period compared with June 1-20,” he told Bernama.
Further supporting the sentiment was the Malaysian Palm Oil Council (MPOC) expecting CPO prices of between RM4,400 and RM4,650 per tonne in August, due to Indonesia’s implementation of its B50 biodiesel mandate, firmer energy markets and improved biodiesel economics.
At the close, the August 2026 contract fell RM5 to RM4,530 per tonne, while the September 2026 contract increased RM9 to RM4,583 and the October 2026 contract rose RM12 to RM4,622.
The November 2026 contract added RM9 to RM4,654 per tonne, the December 2026 contract gained RM4 to RM4,683, and the January 2027 contract topped up RM2 to RM4,711.
Trading volume rose to 110,403 lots from 78,960 lots on Tuesday, while open interest increased to 291,077 contracts from 285,461 contracts yesterday.
The physical CPO price for August South was unchanged at RM4,540 per tonne.
-- BERNAMA