Malaysian palm oil futures have climbed to above MYR 4,260 per tonne, marking a second consecutive session of gains. This increase comes as China has reportedly upped its palm oil purchases amidst its ongoing trade conflict with Canada. The pricing has distanced itself from a nearly two-month low, influenced by ongoing uncertainties around weather conditions. Forecasts indicate a potential transition from a La Niña to a neutral El Niño phase between March and May, which could significantly affect output levels.
On the demand front, increased orders from Egypt, Kenya, and Nigeria are anticipated. Despite these developments, contracts have experienced an approximate 2% decline this week, marking the third consecutive weekly drop, primarily due to sluggish exports. Data from cargo surveyors indicates that palm oil shipments from March 1 to 25 are expected to decrease by 8.1% to 8.5% compared to February.
Moreover, trading activity could see a downturn next week as the Eid al-Fitr holiday approaches, which may impact short-term demand. In Indonesia, plans are underway to introduce one million weevils into plantations to enhance pollination and boost yields. Although this initiative may bolster long-term supply, its effects will take time to materialize, leaving exports and weather conditions as critical short-term factors.
