FINWIRES · TerminalLIVE
FINWIRES

Asia Biofuels Update: Palm Oil Retreats on Weak Export Demand

By

Malaysian palm oil futures slipped further on Tuesday due to slowing exports, although gains in crude oil prices following US military strikes on Iran limited losses.

The Bursa Malaysia Derivatives' June crude palm oil contract dropped 0.43% to 4,391 Malaysian ringgit ($1,110.10) per metric ton. The July palm oil contract lost 0.65% to 4,417 ringgit/mt.

Softening Malaysian shipments weighed on prices, after cargo surveyors reportedly estimated a 14.5% to 18.0% month-over-month decline in export volumes for the May 1-25 period.

Malaysian flows may find a temporary upside from Indonesia's move to centralize exports of palm oil and other commodities to a state-backed agency, which is planned for implementation beginning September, Trading Economics reported.

The new export policy could further reduce Indonesian shipments of palm oil, which have already seen a drop in March to 2.17 million metric tons from 2.88 mmt a year earlier, according to industry association data, cited by the financial data platform.

Indonesian Palm Oil Association chairman Eddy Martono, as cited by Jakarta Globe, cautioned that the new system, if not managed properly, may disrupt long-established export markets and trading networks.

Uncertainties in export mechanisms have also impacted farmers, as palm oil fresh fruit bunch prices fell to around 1,000 Indonesian rupiah ($0.06) per kilogram from 2,800 rupiah/kg, after traders, mills, and companies withheld purchases and temporarily halted sales, according to a palm oil farmer association cited by Reuters.

The government reportedly argued that the centralized system will enhance oversight of shipments, preventing state revenue leakages of around $150 billion annually.

In Malaysia, a possible US-Iran peace deal could pressure palm oil prices going forward due to decreasing appeal of biofuels, Phillip Capital said.

The market will be closed on Wednesday for Eid holiday.

Related Articles

Commodities

GCL SI, Getz Energy Plan 1 GW of Solar Power in Thailand

China's GCL System Integration and Thailand-based Getz Energy, subsidiary of Global Power Synergy, have signed a memorandum for up to 1 gigawatt of solar photovoltaic modules for installation in Thailand, GCL SI said in a statement on Monday.GCL SI will supply both photovoltaic modules and battery energy storage systems and deliver them in phases in tandem with construction and grid connection timetables.The deal supports growth of the GPSC and Getz renewable energy portfolios domestically in Thailand, with utility-scale solar a major part of the group's long-term decarbonization strategy, the statement said.GCL SI said the agreement reflects accelerating growth in utility-scale renewables across Southeast Asia more broadly with growing electricity demand and decarbonization targets boosting clean technologies.

Commodities

IMO Expands Safety Rules for Hydrogen, Ammonia Fuel Use

The International Maritime Organization's Maritime Safety Committee approved a series of new interim training and safety guidelines covering ammonia, methanol, hydrogen and liquefied hydrogen, DNV said on Friday.The IMO's MSC held its 111th session from May 13 to May 22.DNV said that the MSC approved "Interim guidelines on training for seafarers on ships using methyl/ethyl alcohol as fuel" along with separate guidance for vessels operating on ammonia fuel.MSC 111 endorsed a work plan to further develop training requirements for seafarers serving on vessels using low- and zero-carbon fuels and emerging propulsion technologies, reflecting the industry's growing shift toward alternative energy systems.The committee, in addition to training standards, approved safety guidance for ships using hydrogen as fuel, marking another step in the regulatory framework for one of the shipping sector's most closely watched future energy options.For ammonia, MSC 111 approved interim guidelines addressing the use of ammonia cargo as fuel on gas carriers. The guidance focuses on safe handling practices, particularly in areas outside cargo zones, with an emphasis on protecting crew and vessel safety.The committee also adopted revisions to existing recommendations for the carriage of liquefied hydrogen in bulk, updating Resolution MSC.565. The revision introduces a new section on cargo containment systems for membrane-type tanks, including provisions for maintaining vacuum-sealed insulation spaces.Separately, MSC 111 approved draft amendments to Safety of Life at Sea, also known as SOLAS, Chapter II-1, clarifying that the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels or the IGF Code applies to ships using gaseous fuels regardless of flashpoint characteristics.The amendments introduce a formal definition of "gaseous fuels" and update related provisions on "low-flashpoint fuels."Consequential amendments to the IGF Code were also agreed upon, aligning technical definitions and scope across the regulatory framework.DNV said that the draft amendments to SOLAS and the IGF Code are expected to enter into force on July 1, 2028, subject to formal adoption at MSC 112 in December 2026.

Commodities

India Eases LPG Connection Rules for Consumers Moving to PNG Networks

India notified amendments to the liquefied petroleum gas supply rules on Monday, allowing consumers with piped natural gas connections to terminate or restore LPG access under new, more flexible provisions.The Ministry of Petroleum and Natural Gas issued the Liquefied Petroleum Gas Regulation of Supply and Distribution Amendment Order, 2026, according to a government statement.The revised rules target domestic LPG consumers who later obtain PNG connections and seek greater flexibility in managing fuel access, the ministry said.Under the amendment, consumers can apply to terminate their LPG connection within 30 days after receiving a piped natural gas connection.Consumers can also request a transfer voucher that allows future restoration of the LPG connection if they later move to areas without piped natural gas infrastructure.The amendment provides additional convenience for households relocating to regions where PNG networks are still unavailable.The ministry said transferable employees, migrant families, tenants, students and households shifting to non-PNG areas are expected to benefit from the revised provisions.