FX.co ★ Palm Oil Poised for First Weekly Drop in Five

Malaysian palm oil futures dropped for the second consecutive session, falling below MYR 4,200 per tonne on Friday. This decline was influenced by a slump in rival edible oils on the Dalian and Chicago exchanges. The benchmark contract is on track for its first weekly drop in five weeks, decreasing nearly 1%, as traders exhibit caution in anticipation of the Malaysian Palm Oil Board’s forthcoming data release on February 10. Market sentiment was further curtailed by the anticipated Consumer Price Index (CPI) and Producer Price Index (PPI) figures from China, the leading buyer. Additionally, crude oil prices are poised for their first weekly decline in several weeks ahead of significant discussions. However, losses were mitigated by a weaker ringgit and robust shipment data, with cargo surveyors indicating January exports rose by 14.9–17.9% month-on-month, spurred by restocking ahead of the Spring Festival and Ramadan. Demand from India, the top consumer, also saw an improvement in January, with imports surging 51% to reach a four-month peak after a previous decline. According to Reuters, Malaysia’s inventory levels likely halted a 10-month increase in January, as strong export performance countered a seasonal slowdown in output.