Palm oil recovers lost ground with crude oil rebound, but gains are capped by unclear timeline for Indonesia's B50 program

汇通财经2026/04/09 10:32

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Malaysia palm oil futures closed more than 1% higher on Thursday, with the benchmark June contract settlement price climbing 56 ringgit to 4,642 ringgit per tonne. This marks a technical rebound following a drop of over 3% in the previous trading session, taking advantage of the recovery in crude oil prices.
Bagani, head of commodity research at Mumbai brokerage Sunvin Group, pointed out that ongoing mixed signals regarding the timetable for Indonesia's B50 biodiesel blending policy continue to dampen market sentiment. There is still no conclusive answer as to whether the policy applies only to subsidized parties or covers all entities.
Although Indonesia’s Ministry of Energy has issued a decree setting out the implementation schedule for the biofuel blending mandate, the lack of clarity around execution details makes it difficult for the market to anchor expectations for the increase in palm oil industrial demand.
The underperformance of alternative edible oil futures from the Chinese market has also limited the rebound potential for palm oil. Dalian soybean oil contracts closed down 0.68%, palm oil contracts fell 0.52%, while Chicago soybean oil edged up 0.58%.
The recovery in crude oil prices has become a key supportive factor, as market doubts persist over whether the fragile two-week ceasefire agreement can maintain the smooth passage of energy shipments through the Strait of Hormuz. Brent crude’s stability has strengthened the economic viability of palm oil as an alternative feedstock for biodiesel production.
The ringgit against the US dollar weakened slightly by 0.15%, reducing the marginal cost of palm oil priced in the local currency for foreign holders, resulting in a slight boost to export demand.
Institutional analysis suggests that the short-term trend for palm oil will depend on the clarity of Indonesia's B50 policy and developments in the Middle East. If access restrictions in the Strait of Hormuz continue to drive up crude oil premiums, palm oil’s valuation support from biofuel demand may see further reinforcement.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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Palm oil recovers lost ground with crude oil rebound, but gains are capped by unclear timeline for Indonesia's B50 program

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