Indonesia plans to create its own palm oil benchmark by June

Indonesia's Commodity Futures Commission has asked local palm oil exporters to enter into contracts through the local futures exchange. It is planned that the new rules will work by June this year, and Indonesia will receive its own benchmark for palm oil, and its buyers will be guided by the price determined domestically.

Indonesia is the world's largest supplier of palm oil, but most exporters make deals directly with buyers, bypassing the futures exchange. At the same time, the state trading company KPB Nusantara conducts auctions for the supply of physical volumes of palm oil, but does not offer contracts for it.

On the news, May palm oil futures on Bursa Malaysia rose 1.47% in two sessions to RM4,357/t or $974/t (+3.7% for the week), a 4-month high . The quote was also supported by a weaker ringgit against the dollar and forecasts of lower inventories and production due to heavy downpours.

According to a Reuters poll, traders expect palm oil stocks in Malaysia to fall 2.7% from January to 2.21 million tonnes in February, production to fall 8.65% to an annual low of 1.26 million tonnes, and an increase export by 0.3% to 1.14 million tons.

The market supported Sunvin Group's forecast that in FY 2022/23 India will increase imports of edible oil compared to the previous season from 14.15 to 15 million tons, in particular palm oil - from 8.25 to 8.75 million tons.

On the Chinese stock exchange in Dalian, soybean oil contracts rose by 1.9%, and palm oil contracts rose by 1.2%.