CPO Futures Close Lower Over Indonesia's Biofuel Programme Implementation

By Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, Dec 31 (Bernama) -- The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed lower on the last trading day of 2024, due to the upcoming implementation of Indonesia’s biofuel programme in January, following the recent rally in CPO prices, a dealer said.

Indonesia's biofuel programme is a nationwide mandate to blend palm oil-based biodiesel with diesel fuel, aimed at reducing fuel imports, increasing domestic demand for palm oil, and cutting emissions.

Palm oil dealer David Ng noted that the slower pace of Indonesia's biofuel programme could hurt demand for CPO, which, in turn, would exert pressure on its prices.

“Lower export estimates are also seen weighing on CPO prices.

“We see support at RM4,400 and resistance at RM4,600 per tonne,” he told Bernama.

According to reports, Indonesia’s plan to expand its biodiesel mandate looks likely to be implemented gradually. 

At the close, the January 2025 contract dropped by RM64 to RM4,861 per tonne, February 2025 lost RM97 to RM4,617 per tonne, and March 2025 fell by RM103 to RM4,448 per tonne.

April 2025 was down RM87 to RM4,305 per tonne, May 2025 slipped by RM65 to RM4,205 per tonne and June 2025 shed RM52 to RM4,140 per tonne.

Trading volume rose to 72,477 lots from 45,092 lots on Monday, while open interest eased to 239,495 contracts from 239,837 contracts yesterday.

The physical CPO price for January South fell RM80 to RM4,950 per tonne.

-- BERNAMA