Palm oil prices on the European vegetable oils market were lower on Thursday, weighed by poor demand and weakness in the crude oil market. The drop in crude oil prices has helped to reduce demand from the biofuels sector while dealers also cited slow demand from key buyers such as China and India.
"The crude oil discount to palm oil is hovering around $300 a tonne, curtailing any discretionary demand for biodiesel and posing a challenge for governments looking to implement biodiesel mandates," Rabobank said in a report on Thursday. Rabobank also said a favourable outlook for soyabean crops in Latin America also continued to weigh on palm oil prices.
RBD palm olein for April/June shipment last traded at $637.50 a tonne, down $15 from Wednesday. Other vegetable oil prices were also lower as CBOT soyaoil fell by around 1.5 percent, weakened by the prospect of bumper soyabean harvests in South America.