PALMOILMAGAZINE, JAKARTA – Global crude palm oil (CPO) prices extended their rally, reaching the highest level in four weeks, driven by rising market confidence in Malaysia’s upcoming palm-based biodiesel program.
According to Reuters, during Tuesday’s trading (May 5, 2026), the benchmark July 2026 CPO futures contract on Bursa Malaysia Derivatives surged by RM88 per ton, or about 1.9 percent, to close at RM4,710 per metric ton. This marked the highest closing level since April 7.
The rally builds on a series of recent gains, largely supported by policy-driven sentiment from Malaysia’s energy sector. The government is set to implement a B15 biodiesel mandate in June, requiring a 15 percent palm oil blend in diesel fuel.
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The policy aims to curb domestic fuel costs while expanding the role of palm oil in the national energy mix. Market participants expect the move to significantly boost Malaysia’s domestic CPO consumption, reinforcing price support amid global market fluctuations.
In line with the global trend, Indonesia’s domestic CPO prices also moved higher. Prices set by Kharisma Pemasaran Bersama Nusantara (KPBN) reached IDR 15,625 per kilogram on Tuesday, up IDR 225/kg or approximately 1.46 percent compared to IDR 15,400/kg recorded on Monday.
Support also came from the broader vegetable oil market. On the Chicago Board of Trade, soybean oil (soyoil) prices increased by around 0.41 percent, lending additional strength to palm oil prices.
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Meanwhile, trading activity on the Dalian Commodity Exchange remained suspended due to a public holiday and is scheduled to resume on May 6. This temporarily shifted market focus toward Bursa Malaysia as the primary price reference.
With supportive biodiesel policies and strengthening rival vegetable oil prices, CPO is expected to maintain its upward momentum in the near term, although market fundamentals such as production and global demand will continue to play a decisive role. (P3)
