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EU negotiators agreed to phase out palm oil use in transport fuels from 2030. The decision sets up a clash with producers Malaysia and Indonesia.
Removing palm-based biofuel demand in the EU reduces vegetable oil demand over time and is bearish for palm oil, with some spillover to soyoil through substitution.
reuters.comJun 14, 2018After 400 past bearish policy events, Palm Oil moved a median -0.0% over 5 sessions (49% higher; middle half -1.3% to +1.1%), and +0.2% over 20.
After 351 past bearish policy events, Soybean Oil moved a median -0.0% over 5 sessions (49% higher; middle half -1.7% to +1.8%), and -0.2% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The EU agreement on 2018-06-14 to phase out palm oil in transport fuel by 2030 is a same-day policy shock to vegetable oil demand and sentiment, though its direct effect on soybean oil is ambiguous.
