FX.co ★ Palm Oil Set for Solid Weekly Gains

Malaysian palm oil futures advanced for the third consecutive session on Friday, nearing MYR 4,080 per tonne and poised for a weekly increase of approximately 2%. This upward momentum was bolstered by a weaker ringgit, as well as stronger performance in rival edible oil markets in Dalian and Chicago. Additionally, there is a growing anticipation of heightened demand as the Lunar New Year and Ramadan in February approach. In Indonesia, authorities have indicated a potential increase in palm oil export levies to support the biodiesel mandate, a development that could restrict export volumes from the world's leading producer. In China, a major purchaser, consumer prices continued to rise while producer price deflation eased, suggesting that economic stimulus measures are beginning to fuel demand. Nevertheless, the market's gains were tempered by caution ahead of the December data from Malaysia’s industry regulator, expected on Monday, which anticipates inventories reaching multi-year highs. Concurrently, palm oil imports in India, the largest buyer, dropped to an eight-month low in December due to reduced winter consumption and a shift towards alternative oils.