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Asean’s biodiesel push fuels palm oil rally, but will SGX-listed players gain?

Higher crude palm oil prices support upstream plantation earnings, but could be a double-edged sword for integrated operators: analysts

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Benicia Tan

Published Mon, May 4, 2026 · 08:30 PM
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    • Indonesia's B50 mandate targets a 50-50 mix of palm oil-based fuel with diesel in all sectors from 2028.
    • Indonesia's B50 mandate targets a 50-50 mix of palm oil-based fuel with diesel in all sectors from 2028. PHOTO: REUTERS

    [SINGAPORE] A crude oil supply shortfall from the prolonged closure of the Strait of Hormuz has accelerated biodiesel mandates in South-east Asia, driving up crude palm oil (CPO) prices and lifting Singapore Exchange-listed plantation stocks.

    Biodiesel – a substitute for petroleum-based diesel fuel produced by reacting vegetable oil or animal fat with alcohol – is becoming more cost-competitive.

    Following the US-Iran war, CPO’s premium to gas oil has narrowed to around US$14 a tonne, from an average of around US$271 a tonne over the past year.

    oilIran warPalm oilSGXbumitama agriSustainable aviation fuelGolden Agri-Resourceswilmar internationalfirst resourcesenergy transitionEnergy & Commodities

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