JAKARTA: Malaysian palm oil futures rose on Friday after two sessions of losses, buoyed by hopes of higher demand in Indonesia from a potential new biodiesel rule next year, while traders awaited industry data for further direction.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 0.96% to 3,981 ringgit ($906.21) per tonne by the midday break, after shedding 3.33% in the previous two sessions. For the week so far, it is up 0.73%.
The market was supported by expectation around Indonesia rolling out of biodiesel with a 35% blend of palm oil-based fuel, up from 30% at present, which may happen as early as January, a trader in Kuala Lumpur said.
Some traders were however worried about the smaller-than-expected blend. Market participants had expected a 40% blend.
Meanwhile, some market participants were awaiting the US Department of Agriculture data due later in the day and the Malaysian Palm Oil Board data next week for further direction, the trader in Kuala Lumpur said.
Dalian’s palm oil contract was down 0.24%, while its most active soyoil contract was little changed. Soyoil prices on the Chicago Board of Trade eased 0.24%.
Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
The share of palm oil in biodiesel and in food in the European Union is expected to fall significantly within the next 10 years, leading to a sharp drop in imports, the European Commission said on Thursday.
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