KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives extended modest gains on Wednesday due to the government’s plan to expand the B10 biodiesel programme and its proposal to reduce the windfall levy.
These initiatives helped to restore some optimism amid worries over rising supply and losses in soy oil markets, said Mumbai-based Sunvin Group commodity research head Anilkumar Bagani.
He said Malaysia is considering expansion of its B10 biodiesel programme, which requires the mandatory use of 10 per cent palm oil in the industrial sector, but did not say when it will be finalised.
Currently, the B10 programme is only for the transportation sector.
"Malaysia has rolled out a B20 programme in phases and the nationwide implementation of that would increase crude palm oil consumption to over one million tonnes per annum,” he told Bernama.
On top of that, the Ministry of Plantation and Commodities (MPC) has submitted a proposal to the Finance Ministry for the windfall profit levy (WPL) price for Sabah and Sarawak to be at 1.5 per cent under Budget 2024, compared to the current 3.0 per cent.
Meanwhile, the Malaysian Palm Oil Association (MPOA) has urged the government to raise the WPL price threshold by RM500 per tonne of crude palm oil (CPO) to RM3,500 per tonne for Peninsular Malaysia, from RM3,000 per tonne currently, and to RM4,000 per tonne from RM3,500 per tonne for Sabah and Sarawak.
At the close, the contracts for October 2023 and November 2023 were RM2 higher at RM3,646 and RM3,674 per tonne, respectively, while December 2023 added RM7 to RM3,715 per tonne.
January 2024 and February 2024 gained RM11 each to RM3,757 and RM3,795, respectively, while March 2024 improved RM10 to RM3,816.
Total volume narrowed to 40,277 lots from 45,653 lots on Tuesday, while open interest dropped to 221,966 contracts from 222,038 contracts previously.
The physical CPO price for October South was unchanged at RM3,680 per tonne for the third day straight. - Bernama
