Malaysian palm oil futures fell on Monday after the government said it was in talks with oil and automotive companies to delay the start of its B10 biodiesel mandate to July.
The ministry of plantation industries and commodities said in response to a Reuters' question that the mandate would start a month later than initially planned and would aim to complete full implementation of its new standard by August.
Malaysia's so-called B10 programme aims to raise the minimum bio-content of biodiesel to 10% for the transport sector, mopping up more palm oil for blending purposes and increasing domestic demand.
The world's second largest palm oil producer after Indonesia has also said it would raise the bio-fuel content for the industrial sector to 7%
Palm prices had fallen in early trade after the Sun newspaper reported that the B10 programme would be suspended until further notice, a trader said.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange fell 2.1% to 2,400 ringgit (US$591) per tonne on Monday. It hit an intraday low of 2,397 ringgit, its weakest level in over five months.
Palm oil futures rose on Friday after nine consecutive days of losses.
Traded volumes stood at 47,297 lots of 25 tonnes each at the close of trade on Monday, versus the 2015 daily average of 44,600 lots.
A stronger ringgit also impacted futures prices.
A rising ringgit against the dollar makes palm more expensive for holders of foreign currencies, as the vegetable oil is traded in ringgit.
The ringgit rose 0.9% to hit 4.0620 per dollar around on Monday evening. It earlier hit 4.0640 per dollar, its strongest levels since June 10, as the weekend by-election wins by Malaysia's ruling party boosted ringgit sentiment.
Weak export data also did little to support markets.
Weak export data also did little to support markets.
Cargo surveyor data on Monday showed that exports of palm oil from June 1-20 fell 8%-10% from the same time period a month ago, as demand from mainly Muslim markets weakened leading up to the Eid festival.
No comments:
Post a Comment