Palm oil jumps above RM4,000 mark to track soy oil, crude
Palm oil surged past RM4,000, tracking soy oil gains after the U.S. proposed record biofuel blending targets for 2026. The 24.02 billion-gallon mandate boosts edible oil demand, lifting palm and soy oil prices. Crude oil’s rise amid Middle East tensions also supports palm. Higher energy prices could drive biofuel demand, benefiting palm oil as a key feedstock.
KUALA LUMPUR:
Palm oil jumped above the RM4,000 mark to track gains in soy oil, which surged on Washington’s proposal to allow refiners to blend a record amount of biofuels into gasoline and diesel next year.
The long-awaited plan that was unveiled by the Environmental Protection Agency on Friday aims to boost American biofuel production and deter imports.
It would require refiners to mix a record 24.02 billion gallons of biofuels into conventional diesel and gasoline.
That is nearly 8% higher than the 2025 target and was more than expected by many analysts.
The proposal “is supportive of edible oil demand and crude palm oil prices, as the biodiesel mandate will help sustain US consumption of edible oils,” CIMB Securities analysts Ivy Ng and Lim Yue Jia said in a note.
Chicago soy oil extended gains today after surging more than 6% on Friday, putting it on track for the biggest two-day jump in almost three years.
Palm futures surged as much as 4.1% in Kuala Lumpur.
The rally in crude oil prices due to the conflict in the Middle East is also buoying palm.
Global benchmark Brent extended gains today after surging 7% on Friday.
Investors are bracing for any attacks on energy infrastructure and shipping in a region that produces around a third of the world’s crude.
“A potential escalation could disrupt oil supplies, pushing energy prices higher and increasing both the cost of palm oil production and demand for biofuels,” said Darren Lim, a commodities strategist at Phillip Nova Pte Ltd.
“Biofuels become more competitive when crude prices rise, often prompting shifts in demand away from petroleum-based fuels,” he said in a note.
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Source : Free Malaysia Today
