Global palm oil prices surged to a five-week high, supported by steady export demand and Indonesia’s continued commitment to its B40 biodiesel mandate. The rise reflects a combination of supply-side discipline and strong buying activity in commodity markets.
Indonesia, the world’s largest palm oil producer, continues to enforce the B40 policy, which requires 40% biodiesel blending with palm oil. This has tightened domestic supplies available for export, giving an upward boost to international prices. Analysts note that the policy, while stabilizing local energy needs, also reinforces global market fundamentals for palm oil.
Market participants observed that trading activity from index-linked funds and speculative buyers further strengthened price momentum, even as concerns about large stockpiles in producing countries persisted. Meanwhile, currency fluctuations, particularly the weakening of the Indonesian rupiah against the U.S. dollar, have made exports more competitive, adding to price support.
Despite the short-term gains, some experts caution that global oversupply and potential changes in biodiesel policy could cap further increases. Nevertheless, demand from India, China, and the European Union remains a key driver for market stability. Overall, the combination of Indonesia’s policy stance, export demand, and market positioning has helped palm oil reach its highest level in over a month, highlighting the ongoing importance of biodiesel mandates and trade flows in shaping edible oil prices globally.
