European Palm Oil Prices Rise on Indonesia Biodiesel Plan

Palm oil prices on the European market rose sharply on Thursday as top producer Indonesia proposed to increase biodiesel subsidies in a move which could significantly boost demand.

 

Malaysian palm oil futures recorded their biggest single-day gain since October 2010 on Thursday.

 

Indonesia's government has proposed a three-fold increase in its biodiesel subsidies to 5,000 rupiah (40 U.S. cents) per liter from 1,500 rupiah, aimed at protecting the top producer's fledgling biofuel industry against lower crude prices.

 

Crude palm oil offers were raised by $40 to $30 a ton while product prices were also sharply higher.

 

(Reporting by Nigel Hunt; editing by Susan Thomas)