FX.co ★ Palm Oil Inches Higher on Seasonal Demand Prospects

Malaysian palm oil futures experienced a modest increase, stabilizing around MYR 4,000 per tonne on Wednesday, recovering from the previous session's downturn. This rise was supported by a weaker ringgit and strengthened rival edible oil markets in Dalian and Chicago. Demand outlook has improved in anticipation of the Lunar New Year and the Ramadan fasting month in February. However, the upward movement was constrained by a significant slump in crude oil prices, following U.S. military actions in Venezuela, which adversely affected the broader vegetable oil market. Additionally, concerns persisted regarding diminishing purchases from India, the leading buyer, as December's palm oil imports dropped to an eight-month low due to reduced winter consumption and increased acquisition of alternative oils. Furthermore, reports from cargo surveyors indicated a decline in Malaysia's palm oil shipments by 5.2% to 5.8% on a month-over-month basis in December 2025. Caution was further fueled by a Reuters estimate suggesting that Malaysia's palm oil inventories likely reached their highest level in nearly seven years by December, preceding the release of official monthly data.