November 28, 2019 / 11:24 AM / 15 days ago

VEGOILS-Palm oil reverses losses on tight supply, Indonesia biodiesel push

 (Adds closing prices, trader comment)
    SINGAPORE, Nov 28 (Reuters) - Malaysian palm oil futures
reversed earlier losses to trade over 1% higher on Thursday
after Indonesia announced its plan for a biodiesel push to
reduce fossil fuel use by 165,000 barrels per day (bpd) and as
supply outlook dimmed.
    The benchmark palm oil contract on the Bursa
Malaysia Derivatives Exchange traded 1.5% higher at 2,726
ringgit ($653.72) per tonne at closing, after falling to as low
as 2,645 ringgit earlier in the session. It has declined 3% so
far in the week after a near 7% gain in the previous week. 
    Higher prices towards the end of the session were due to a
tight supply outlook and on more details about Indonesia's
biodiesel plans, a Kuala Lumpur-based trader told Reuters. 
    Malaysian palm producer FGV Holdings said earlier
on Thursday it expects its production of crude palm oil to
increase by a marginal 0.5%-1% in 2020.
    Also on Thursday, a senior Indonesian energy ministry
official said the implementation of the country's plan for
biodiesel to contain 30% palm-based fuel is expected to reduce
fossil diesel fuel consumption by 165,000 bpd.
    Indonesia, the world's top palm oil producer, aims to start
its "B30" programme in January, expanding it from the current
mandatory use of 20% bio-content in biodiesel. 
    It has sparked a palm price rally in recent months on
concerns that the top producer will have less palm oil to
export.
    Also supporting prices was a weaker ringgit, which
fell 0.1% against the dollar, making the edible oil cheaper for
holders of foreign currencies.
    Limiting gains, however, was cheaper palm oil on the Dalian
Commodities Exchange due to a surge in China's imports of the
tropical oil.
    Dalian's January palm oil contract fell 0.9%, while
the soyoil contract edged up 0.2%.
    Palm oil is affected by price movements in related oils as
they compete for a share in the global vegetable oils market.
    
    PALM, CRUDE, SOY OIL PRICES AT 01045 GMT 
 Contract       Month   Last   Change     Low   High  Volume
 MY PALM OIL    DEC9    2726   +39.00    2645   2726   31191
 MY PALM OIL    JAN0    2703   +49.00    2615   2703    3976
 MY PALM OIL    FEB0    2726   +39.00    2645   2726   31191
 CHINA PALM     JAN0    5400   -48.00    5362   5492  271548
 OLEIN                                                     0
 CHINA SOYOIL   JAN0    6228   +10.00    6196   6250  512548
 CBOT SOY OIL   JAN0    30.5    +0.00       0      0       0
 INDIA PALM     NOV9   668.5    +0.50  664.30    670    1191
 OIL                       0                          
 INDIA SOYOIL   DEC9   808.5    +5.45  798.35  808.8   13640
 NYMEX CRUDE    JAN0   57.75    -0.36   57.64  58.14   52581
 
 ($1 = 4.1700 ringgit)

    
 (Reporting by Fathin Ungku; Editing by Shounak Dasgupta)
  
 
 
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