Bursa Malaysia crude palm oil futures fall on concerns over EU Parliament vote on RED II provisions


Benchmark third-month crude palm oil futures on Bursa Malaysia fell to MR2,494/mt, or $630.20/mt at 11:28 am Singapore time (0328 GMT) Wednesday, amid market concerns over the European Parliament's vote due Wednesday on a draft law for the second iteration of the renewable energy directive, or RED II, which includes a provision calling for the elimination of palm oil from biofuels consumed within the EU by 2021.

At the 4:30 pm Asian close Tuesday, April CPO futures contract was assessed at MR2,514/mt, S&P Global Platts data showed.

CPO futures on Bursa Malaysia have been falling since January 9 in the absence of any new bullish factors, and jitters over the direction of the EU vote and weak export demand for Malaysian palm oil, according to market sources.

The futures market had received a boost during the first week of January from the Malaysian government's suspension of the 5.5% CPO export tariff over January-March until palm inventory levels were lowered.

But the upswing was short-lived as the market digested news of the upcoming European Parliament vote and its impact on palm oil if the Parliament successfully votes to eliminate palm oil in European biodiesel by 2021 under the suggested draft law.


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