CPO Futures Higher On Rumours Indonesia May Raise Export Duty To 15 Pct
By Muhammad Fawwaz Thaqif Nor Afandi & Durratul Ain Ahmad Fuad
KUALA LUMPUR, Jan 7 (Bernama) -- Crude palm oil (CPO) futures on Bursa Malaysia Derivatives closed higher on Wednesday on market rumours that Indonesia may raise CPO export duty to fund the B50 biodiesel mandate, said a trader.
Kuala Lumpur-based proprietary trader David Ng of Iceberg X Sdn Bhd said market sentiment was also lifted by the higher soybean oil prices on the Chicago Board of Trade (CBOT).
“We see support above RM3,950 per tonne and resistance at RM4,250 per tonne,” he told Bernama.
Ng said there are rumours that Indonesia might raise its CPO export levy to 15 per cent from 10 per cent between February and March 2026 to fund B50 biodiesel subsidies ahead of the mandate’s implementation on July 1, 2026.
“Higher duty will make Malaysia CPO cheaper, which translates to higher demand mainly from China and India,” he said.
Echoing Ng, Mumbai-based Sunvin Group commodity research head Anilkumar Bagani said market traders are closely monitoring reports that relevant Indonesian authorities will meet by this weekend to raise palm oil export levies by around five per cent to support the upcoming higher biodiesel mandate.
“The increase in Indonesian palm oil export taxes, if it happens, will be positive for Malaysian palm oil exports, as it will increase its competitiveness,” he said.
Meanwhile, Anilkumar said that December 2025 palm oil production estimates from the Malaysian Palm Oil Association (MPOA) and UOB Kay Hian indicate a much slower rate of stock reduction than the general market consensus.
He said MPOA estimated Malaysia’s December 2025 palm oil production was down 4.64 per cent, while UOB Kay Hian estimated it was down 2.0 per cent to 6.0 per cent, compared with the market consensus of a 9.0 per cent to 9.5 per cent decline.
“Thus, the recent previews suggesting Malaysian palm oil December end stocks at 2.95-3.01 million tonnes will have to be revised,” he said.
For the January 1-5, 2026 period, Anilkumar said the Southern Peninsular Palm Oil Millers Association (SPPOMA) estimated production down by nearly 35 per cent from the Dec 1-5, 2025 period, indicating production peaked in late October 2025.
At the close, the January 2026 contract gained RM32 to RM3,960 per tonne, February 2026 increased RM40 to RM4,013 per tonne, and March 2026 rose RM43 to RM4033 per tonne.
The April 2026 contract edged up RM42 to RM4,042 per tonne, May 2026 strengthened RM41 to RM4,042 per tonne, and June 2026 gained RM40 to RM4,031 per tonne.
Trading volume advanced to 84,068 lots from 63,848 lots on Tuesday, while open interest fell to 251,439 contracts from 257,198 contracts previously.
The physical CPO price for January South gained RM20 to RM4,000 per tonne.
-- BERNAMA