Palm oil quotes support Indonesia's plans to increase its biodiesel content to 40%

The world's largest producer of palm oil, Indonesia, in February increased the mandatory share of biodiesel from 30% to 35%, and plans to increase it to 40% in the following years in order to reduce dependence on crude oil and maximize the use of its own resources, the ministry said. energy of the country.

For this purpose, the authorities are conducting road tests of the B40 mandate, although the transition to 35% has not been fully implemented in some regions, as part of the mixing equipment needs to be modernized and is not working correctly. The Ministry of Energy insists that the B35 mandate be fully implemented by August 1.

As of June 25, biodiesel consumption in the country amounted to 5.2 million kiloliters of the 13.15 million kiloliters allocated for this year.

Indonesia's plans to increase biodiesel production amid the first signs of the El Niño weather phenomenon could reduce global supplies of the most popular cooking oil, sending palm oil prices higher this year.

September palm oil futures on Bursa Malaysia rose 2.2%, or 81 ringgit/t, to their highest since June 19 at 3,756 ringgit/t, or $804.45/t, on Wednesday, reversing the previous session's decline on higher prices on crude and competing edible oil.

The increase in the discount on palm olein compared to soybean oil allows us to hope for the recovery of exports in July.

Soybean oil futures rose by 0.8% and palm oil futures by 2.3% on the Dalian exchange, while soybean oil futures rose by 0.4% on the Chicago exchange.

Indonesia set the reference price for crude palm oil (CPO) at $747.23/t for the period July 1-15, while it currently stands at $723.45/t.

Malaysia for June 1-25 reduced palm oil exports by 4.5%, according to estimates by AmSpec Agri Malaysia, or by 8.7%, according to surveyor Intertek Testing Services, compared to the corresponding period in May.