FX.co ★ Palm Oil Rises Above MYR 4,100

Malaysian palm oil futures remained above MYR 4,100 per tonne on Tuesday, recovering from slight losses experienced in the previous session. This recovery was driven by positive trends in edible oils on the Dalian and Chicago exchanges. Additionally, expectations of a 15%–17% decrease in January production, combined with seasonal demand increases ahead of the Lunar New Year and the beginning of Ramadan in February, further bolstered prices. Demand from India, the largest global purchaser of palm oil, is anticipated to recover following a significant dip in December imports to an eight-month low. Nonetheless, a stronger ringgit and caution preceding cargo surveyors' estimates for the first 20 days of January shipments limited further price hikes. Analysts highlight that inventories remain high, which continues to exert pressure on the market. Looking forward, Reuters forecasts that crude palm oil futures for 2026 will average slightly below those of 2025. In Indonesia, the decision by the government to postpone the B50 biodiesel mandate while continuing with B40 has further moderated demand expectations.