A new record for palm oil

Palm oil renewed its intraday record as Indonesia, the largest producer, focused on the domestic market amid rising vegetable oil prices.

April futures contracts rose 2% to $1248,179 per tonne (5,228 ringgit) after rising 1.8 percent on Wednesday, while soybean oil, palm oil's closest fuel and food substitute, rose for a third day.

Palm oil, which rose more than 30 percent last year, has gained 11 percent since the start of 2022.

According to Avtar Sandu, Senior Commodities Manager at Philip Futures, reasons such as Indonesia's export controls, the spike in oil prices, and the tightening of soybean oil in the Chicago and Dalian markets are behind the rise.

Indonesia has required palm oil exporters to notify their sales plans in order to curb rising cooking oil prices by providing an adequate supply to the domestic market. With this practice, the country aims to make sure that the domestic market has enough products before approving the shipping declaration letters.

Indonesia's efforts to mix biofuels, consisting of 40 percent palm oil, into diesel fuel, have also led to an increased demand for palm oil, according to Sandu. The country will conduct road tests of these hybrid fuel-powered vehicles in February and will complete the work within five months.