FX.co ★ Palm Oil Recovers

Malaysian palm oil futures experienced an approximately 1% increase, surpassing MYR 4,100 per tonne on Thursday. This climb marks a rebound from the previous session's decline, driven by gains in edible oils on the Dalian exchange. Data released by the Malaysian Palm Oil Board revealed a 5.3% reduction in November production to 1.94 million tonnes, bolstering prices. Additionally, growing anticipation of higher seasonal demand, particularly in view of the upcoming Lunar New Year and Ramadan, further contributed to market optimism. Despite these positive trends, the contract has declined by about 0.8% this week, overturning advances from the prior two weeks due to subdued early export predictions. Cargo surveyors reported a 10.3% to 15% decrease in shipments from December 1 to 10 compared to the same timeframe in November. Concurrently, end-of-November inventories increased by 13% from October, reaching 2.84 million tonnes, the highest level in six and a half years. This stockpile build-up coincides with Malaysia's total annual output projected to surpass 20 million tonnes for the first time, aided by improved labor conditions, more efficient harvesting techniques, and the maturation of plantations.