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[KUALA LUMPUR] The upward trend in crude palm oil prices is expected to continue this year on lower production forecasts, with an average price of RM2,590 a tonne, the Malaysian state news agency Bernama reported, citing the Malaysian Palm Oil Council (MPOC).
Malaysia's palm oil output for 2016 is forecast at 20.1 million tonnes, up from 19.96 million tonnes last year, MPOC Chief Executive Yusof Basiron was quoted as saying.
Biodiesel production in Malaysia, the world's second-largest palm producer behind Indonesia, was estimated at 530,000 tonnes last year, up from 359 million litres in 2014.
Malaysia currently implements a B7 programme that mandates a minimum 10 per cent of bio content in diesel. Higher consumption of the tropical oil through biodiesel mandates will help to soak up more palm oil for blending purposes and underpin benchmark prices, which rose to a one-week high of RM2,479 on Tuesday.