Palm oil price revival depends on biodiesel scheme

Going into the second half of the year, many quarters are anticipating the country’s steep palm oil stocks can be reduced considerably – thanks to the nationwide implementation of the B5 biodiesel programme that takes effect this month.

It is envisaged that some 500,000 tonnes of palm oil annually would be taken up from the palm oil stockpile for B5 biodiesel that will be used in the Government’s subsidised and non-subsidised sectors.

(The B5 biodiesel is a blend of 5 per cent palm oil or palm methyl ester (PME) with 90 per cent diesel fuel)

The Government’s strong push for the biodiesel mandate could translate into the steep domestic palm oil stocks being reduced to below one million tonnes and also provide a floor price for CPO at RM2,000 per tonne.»