KUALA LUMPUR: Malaysian palm oil futures rose for a third consecutive session on Wednesday evening, reversing losses seen in early trade, as news that Indonesia had won an appeal against the European Union in a trade dispute over biodiesel lifted the market.
The EU’s highest court ruled that the bloc must eliminate anti-dumping duties on imports of Indonesian biodiesel products. Indonesia is one of the world’s largest exporters of palm oil-based biodiesel. The tropical oil is used as feedstock to make the fuel substitute.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 0.5 per cent to 2,448 ringgit ($623.85) a tonne at the close. Trading volumes stood at 62,284 lots of 25 tonnes each at the end of the trading day.
“News on Indonesian biodiesel lifted the market, while buyers may also want to buy now before the export tax on crude palm oil kicks in,” said a palm oil futures trader in Singapore. Malaysia in early January suspended its export tax on crude palm oil for three months to increase demand and boost prices, as it expected stockpiles to grow in 2018. The export tax suspension will end on April 7.
Exports of Malaysian palm oil products for March 1-20 rose 15.3pc to 913,091 tonnes from the 791,992 tonnes shipped during Feb 1-20, AmSpec Agri Malaysia said on Tuesday.
Published in Dawn, March 22nd, 2018
