PALMOILMAGAZINE, KUALA LUMPUR – Global crude palm oil (CPO) prices kicked off the week on a stronger note, supported by a mix of energy policy developments and movements in competing vegetable oils. Market optimism surrounding Malaysia’s plan to expand its biodiesel mandate emerged as the primary driver behind the price gains.
According to Reuters, CPO trading on Bursa Malaysia Derivatives closed more than one percent higher on Monday (May 4, 2026). The benchmark July 2026 futures contract rose by RM50 per ton, or about 1.09 percent, settling at RM4,620 per ton—equivalent to approximately US$1,169.62 per ton.
The upward movement is closely linked to the Malaysian government’s plan to roll out a B15 biodiesel program starting in June, which will mandate a 15 percent palm-based blend. The policy is part of a broader effort to reduce energy costs, particularly for domestic diesel consumption.
Implementation will be gradual, with the blend expected to increase to 20 percent in the near term. Over the next two to three years, the biodiesel mix could potentially be expanded further to nearly 50 percent.
If executed as planned, the policy is projected to significantly raise Malaysia’s domestic CPO consumption. This would reinforce palm oil’s role as a key renewable energy feedstock in Southeast Asia while providing price support amid ongoing global market volatility.
For market participants, Malaysia’s aggressive biodiesel push is viewed as a strong bullish catalyst, especially as the palm oil sector continues to navigate seasonal production fluctuations and uncertain global demand.
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On the domestic front, CPO prices at Kharisma Pemasaran Bersama Nusantara (KPBN) remained stable. On Monday, prices were set at Rp 15,400 per kilogram, unchanged from the highest offer recorded on Thursday (April 30, 2026).
In addition to biodiesel-related sentiment, gains in soybean oil prices also lent support to the market. On the Chicago Board of Trade, soyoil prices rose by approximately 0.36 percent.
This correlation matters, as CPO and soybean oil compete within the global vegetable oil market. Movements in one often influence the other, amplifying price trends across the sector.
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With supportive policy signals and a positive trend in rival vegetable oils, CPO prices are expected to maintain upward momentum in the short term—though still subject to fundamental pressures such as production levels and global demand dynamics. (P2)
