SINGAPORE: Malaysian palm oil futures rose for a fifth consecutive day on Tuesday, sustaining its longest rally in six weeks, amid prospects of tightening supply and Indonesia’s plans to raise biodiesel blending rates.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 0.71% to 3,952 ringgit ($908.92) a metric ton by the midday break.

Prices were supported by the Indonesian Palm Oil Association’s estimates that Indonesia’s 2024 palm oil output would fall to 52-53 million tons from 54.84 million tons a year ago, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, citing a Bloomberg report.

Indonesia’s president-elect Prabowo Subianto hopes to implement mandatory 50% palm oil-based biodiesel blending by early next year, which he said would cut fuel imports by $20 billion per year.

The country’s trade ministry is mulling a plan to adjust its palm oil export tax to make it more competitive amid weak global demand, Bisnis.com reported on Monday, citing Isy Karim, a senior official at the ministry.

Palm oil climbs to one-month high on Indonesia’s tax, biodiesel plans

Dalian’s most-active soyoil contract added 1.87%, while its palm oil contract climbed 1.56%.

Soyoil prices on the Chicago Board of Trade edged 0.42% lower.

Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market.

The Malaysian ringgit, palm’s currency of trade, depreciated 0.14% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.

Palm oil may retest resistance of 3,985 ringgit, a break above which could confirm a target range of 4,003 ringgit to 4,032 ringgit, said Reuters technical analyst Wang Tao.