KUALA LUMPUR (March 19): Palm oil prices are expected to remain above RM4,450 per tonne in the near term as crude oil stays elevated amid Middle East conflict, an industry council said on Thursday.
A favourable spread between the price of palm oil and that of gasoil is also supporting prices, the Malaysian Palm Oil Council said in a statement. The sharp rise in gasoil prices in the global market has improved the competitiveness of biodiesel usage and blending, the council noted.
“However, weaker economic growth and heightened price volatility arising from uncertainties in the Middle East may temporarily delay imports from major markets, potentially capping the price rally,” the council also known as MPOC flagged.
Prices of the edible oil used in everything from infant formula to biodiesel surged earlier this month to their highest since December 2024, mirroring the rally of crude oil following the outbreak of the Iran war.
The benchmark third-month crude palm oil futures on the Bursa Malaysia Derivatives were trading at RM4,578 per tonne on Thursday.
Indonesia, the world’s largest palm oil producer, is accelerating road tests for B50 biodiesel, which requires a 50:50 mix of palm-based methyl ester and petroleum diesel, to reduce import reliance. Brazil, meanwhile, has proposed raising its biodiesel blending mandate from B15 to B16.
MPOC said India is expected to continue importing Malaysian palm oil in March and April, replacing soybean oil from South America because of steep freight costs.
Voyages from South America to India typically take six to seven weeks, compared with only seven to 10 days from Malaysia, the council noted.
