Malaysian crude palm oil prices soar to record $876 per ton; tracking petroleum oil increase

In Malaysia, crude palm oil futures reached a record $876 per ton, tracking the increase in oil prices to more than $96 per barrel.

The Malaysian government delayed implementation of the Malaysian Biofuel Industry Act, better known as EnvoDiesel, earlier this year due to high palm oil prices that make biodiesel production less profitable. The Plantation Industries and Commodities Minister said that the government would move forward to set an implementation date if palm oil prices were to fall below RM 2000 ($572).

The likelihood of palm oil prices falling to these levels appears incredibly remote at this time. The Malaysian Palm Oil Board (MPOB) announced that annual production of Malaysian palm oil would reach 14 million tons, 15% short of its initial estimate of 16.5 million tons. Further, the price of crude palm oil is already more than 10 percent higher than the upper range of guidance offered by the MPOB this past summer, when it projected a long-term price range of $717 – $807 per ton.

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