PETALING JAYA: Analysts expect the rising crude oil prices and higher freight costs amid current tensions in the Middle East could improve biodiesel economics and strengthen demand for palm oil as a key feedstock. Industry sources indicate that buyers across Asia have accelerated purchases to mitigate potential shipping disruptions and hedge against further price increases, providing near-term support to palm oil prices, according to the research house. Indonesia, the world’s largest palm oil producer, is also reassessing the potential rollout of its delayed B50 biodiesel mandate following the surge in global energy prices. A plantation analyst with a local research house said: “If implemented, this could materially increase domestic palm oil consumption and reduce export availability, thereby tightening global supply.”TA Research, meanwhile, has kept its average crude palm oil (CPO) assumption at RM4,000 per tonne at this juncture. On the positive side, RHB Research said the spike in crude oil prices, up 30.7% since the Middle East war started, has raised CPO prices by 11.6% in the same period.

Source: The Star March 12, 2026 09:34 UTC