Malaysian palm oil futures jumped above MYR 3,700 per ton, hitting its strongest levels in over a month after Indonesia’s attorney general launched a corruption investigation into three palm oil companies which allegedly obtained illegal export permits at a time when shipments were being restricted. Indonesia, which accounts for about 60% of global palm oil supply, has tightened export measures last year and even temporarily banned shipments to secure domestic supply amid soaring local cooking oil prices. The demand for palm oil as a biodiesel feedstock may also increase due to uncertain ethanol-producing conditions in the United States. Dry weather jeopardized soy oil and corn yields while the country’s Environmental Protection Agency delayed the release of biofuel blending volume mandates for 2023-2025. Moreover, hot weather in Southeast Asia exacerbated worries about the impact of El Nino on agricultural production.
