June 01, 2023 (MLN): Malaysian palm oil rose on Thursday, as trade talks with EU were delayed by Indonesia and Malaysia over palm oil dispute.
The benchmark palm oil contract rose by 2.31 % to 3275 ringgit a tonne.
Palm oil has marked a decline for the third consecutive month, closing May with a fall of 4.10%.
Additionally, the benchmark is down 22.87% YTD and 53.33% YoY,
The rise comes after the benchmark declined yesterday by 5.94%, attributed to the latest U.S. inflation data that came in higher than expected.
The contract rose 2.24% last week due to concerns over unfavorable EL Nino weather patterns, but all gains were lost on just the first day of this week.
Indonesia lowers crude palm oil reference price to $811.68 per tonne, making export tax cheaper, as reported by Reuters.
European Union (EU) has recently adopted a law to Ban the imports of products from land cleared of trees.
Trade talks with EU are delayed by Indonesia and Malaysia as they seek better treatment for small-scale farmers.
Fadillah Yusof, Malaysia’s Deputy Prime Minister stated “punitive and unfair treatment towards us and to smallholders in particular”,
Indonesia and Malaysia are the world’s biggest palm oil producers and account for 85% of global palm oil exports.
The EU is the third largest market.
The two countries sent top officials to the EU to express their concerns regarding the deforestation law, as it was a huge threat to local farming businesses.
The deforestation law would ban a variety of products, like beef, soy and other commodities unless the companies could provide evidence that they were not grown on a land deforested after 2020.
