CPO Futures End Lower As Traders React To Indonesia's B50 Biodiesel Mandate
By Durratul Ain Ahmad Fuad
KUALA LUMPUR, July 9 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower on Thursday as traders reacted to Indonesia's official announcement of its B50 biodiesel mandate, which projected lower-than-expected domestic palm oil consumption.
Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said the market had expected the B50 programme to absorb about 17.6 million tonnes of CPO, but the official announcement indicated consumption of 16.7 million tonnes, weighing on market sentiment.
“Allocations have yet to be announced and the market is waiting for further details. These will be important in determining the actual volume of CPO to be utilised under the B50 programme,” he told Bernama.
When asked whether CPO prices would recover once the allocation details are released, he said it would depend on how the market reacts to the announcement.
Indonesia has officially launched its mandatory B50 biodiesel programme today, which the government said would enable the country to eliminate diesel imports for the first time.
Energy and Mineral Resources Minister Bahlil Lahadalia said Indonesia consumes between 38 million and 40 million kilolitres of diesel annually and previously imported around three million to four million kilolitres a year before the introduction of the B50 biodiesel.
He said the programme would increase domestic crude palm oil (CPO) demand from 15.2 million tonnes to between 16.3 million and 17 million tonnes annually, helping provide greater market certainty for the country’s oil palm farmers.
At the close, the spot month July 2026 contract decreased RM21 to RM4,482 a tonne, August 2026 eased RM16 to RM4,556, September 2026 slipped RM15 to RM4,594, October 2026 went down RM10 to RM4,627, November 2026 shed RM9 to RM4,659 and December 2026 inched down RM5 to RM4,689.
The trading volume declined to 84,918 lots from 96,582 lots on Wednesday, while open interest weakened to 284,416 contracts from 288,327 contracts previously.
The physical CPO price for July South remained unchanged at RM4,530 per tonne.
-- BERNAMA
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