News and Articles

• KPBN CPO swung from IDR 15,388/kg to IDR 12,285/kg within a week
• Malaysian CPO settled at $1,154.50/t in late April, down $39.50 month on month
• BOPO spread widened to $528.95/t; POGO spread weakened to negative $103.08/t
• Indonesia set May biodiesel HIP at IDR 14,917 per litre
• Malaysia rolled out B15 biodiesel programme nationwide

Crude palm oil traders saw one of the more volatile weeks in months between May 20 and May 26, with prices in Indonesia and Malaysia moving in opposite directions on alternating sessions. The Indonesian KPBN benchmark fell 5.77% on May 20 after President Prabowo Subianto's announcement that palm oil exports would route through a new state-controlled agency from June 1. By mid-week the same benchmark had bounced to IDR 15,388 per kg on a three-day rally tied to Indonesian export-tightening speculation, before plunging again to IDR 12,285 per kg on weak shipment data and softer external markets.

The Bursa Malaysia futures market mirrored the swing. Malaysian CPO prices held steady early in the week as buyers assessed Indonesia's new export policy, then climbed on rumours of supply-tightening and rallied for three sessions on speculation that Indonesian flows would slow during the June-August transition. Cargo surveyor data showed Malaysian palm oil exports for the early part of May running below expectations, which limited the upside. CME Group's May report had earlier put USD Malaysian Crude Palm Oil first-nearby at $1,154.50 per metric tonne for the April settlement, a drop of $39.50 month on month, with 20-day rolling volatility ranging between 17.3% and 25.6%.

The Bean Oil-Palm Oil spread widened to $528.95 per tonne by end-April, up $204.41 in a month, reflecting strong soybean oil pricing relative to palm. The Palm Oil-Gasoil spread weakened to negative $103.08 per tonne, signalling that biodiesel blending economics for palm have softened. The FOB Indonesia basis narrowed to $80.50 per tonne from $93.50, indicating that Indonesian discounts to Malaysian product have closed.

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Indonesia's biodiesel mandate continues to underpin domestic absorption. The Ministry of Energy and Mineral Resources set the May 2026 Biodiesel Market Index Price at IDR 14,917 per litre plus transport costs, supporting the continuation of the national mandate. Malaysia has begun the nationwide B15 biodiesel programme to lift domestic palm oil demand, while Indonesia continues to prepare for B50 with the National Defense Council flagging productivity as the main constraint.

For refiners, FMCG manufacturers, and biodiesel blenders, the procurement implications are clear. Daily price tracking is now essential through the June-August Indonesian transition. Buyers should pre-position June and July nominations, secure parallel Malaysian volumes as a hedge against DSI documentation delays, and review formula-pricing clauses tied to CIF Rotterdam or FOB Belawan benchmarks. The widening BOPO spread argues for soybean oil substitution where formulations allow, while the weakening POGO spread reduces the incentive for biodiesel-led pull on palm in international markets.