Malaysian palm oil futures extended a downward trend, closing 0.3 percent lower on Monday as weak demand weighed on prices.
SINGAPORE: China is one of the top beneficiaries of the plunge in palm oil prices this year as the country seeks to boost use of the tropical commodity in biofuel to reduce reliance on energy derived from petroleum.
The world’s second-largest economy has imported a record amount of palm methyl ester, an alternative to conventional diesel made out of palm oil, according to PRIMA, a research company focusing on links between biofuel, energy and agricultural markets.
Purchases were 720,000 tonnes in the first 10 months, with Indonesia supplying about 90%, Customs data show. Shipments revived in the second quarter for the first time in about four years as palm prices fell below those of gasoil, or conventional diesel.
The discount continued to widen, reaching US$220 a ton in early October, the heftiest since 2014, increasing the appeal of palm as fuel.
That benefited Indonesia and Malaysia, the top producers of the oil, as they struggled to cope with a global glut and prices at their lowest level in more than three years. — Bloomberg
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