Crude palm oil futures fall to one year low

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KUALA LUMPUR: Crude palm oil (CPO) for third-month delivery fell to a one-year low of RM2,248 on Tuesday after the government decided to delay the bio-diesel programme.

At 4.10pm, it was down RM16 to RM2,251 - the lowest since mid-August 2013.

Both Malaysia and Indonesia had delayed their bio-diesel mandates as the proposal faced some difficulties.

RAM Rating Services said Malaysia postponed the nationwide implementation of its B5-biodiesel mandate by two months to September 2014.

Indonesia's biodiesel mandate also had not performed within expectation, it added.

"We understand that key stumbling blocks for these two countries are the lack of facilities and logistic issues, especially in Indonesia, which is an archipelago. This, combined with the delayed El Nino, is expected to drive the CPO stockpile upwards, limiting the upside for CPO prices for the remainder of the year," it said.

RAM Rating Services Bhd is maintaining its outlook on crude palm oil (CPO) prices for the second half of 2014 (H2,2014) and expects prices to trade at an average of between RM2,300 and RM2,500 a tonne.