CPO Futures Surge to Highest in Over a Week on Bullish Sentiment and Biodiesel Hopes
Crude palm oil (CPO) futures on the Bursa Malaysia Derivatives closed at their highest in over a week on Tuesday, June 16, as bullish sentiment around weather-related risks and Indonesia's biodiesel plans outweighed weakness in energy prices.
The CPO September contract gained 2.07% to close at 4,578 ringgit ($1,128) per tonne, extending gains from the midday when it closed at 4,529 ringgit per tonne.
CPO defied weakness in crude oil prices, which typically exert pressure on palm oil prices due to its use as a feedstock for biodiesel production. The recovery in CPO was supported by expectations of a strong El Niño weather phenomenon in the second half of 2026, which will likely affect palm oil production negatively in the medium to long term.
Market participants are also awaiting Indonesia's announcement on its B50 biodiesel program, with an energy ministry official reiterating the planned July 1 start. Higher biodiesel blending in Indonesia could see lower export availability from the world's largest palm oil producer and keep prices supported.