FX.co ★ Palm Oil Extend Losses to Begin the Week

Malaysian palm oil futures lingered just below MYR 4,350 per tonne, marking a retreat for the second straight session due to indications of declining exports. Recent data from cargo surveyors revealed that Malaysia's shipments in the first twenty days of March experienced a decrease of 5.0%-14.2% compared to the same period in February. Traders maintained a cautious stance in anticipation of the April 2 deadline for the imposition of new U.S. tariffs announced by President Trump. Moreover, projections indicate that palm oil imports by India, the largest consumer, might decrease to a five-year low of 7.5 million tonnes during the 2024/25 marketing year, concluding in October 2025, as the commodity loses its competitive edge to soft oils. However, further losses could be mitigated by Indonesia's intent to increase its palm oil export duty from 3-7.5% to 4.5-10%. This adjustment would potentially raise the cost of Indonesian exports, thereby possibly redirecting demand towards Malaysian products. This policy also aligns with Indonesia's biodiesel mandate, fostering greater domestic consumption and impacting the global supply dynamics. The revised duty rates are slated to become effective three days following their publication, which is presently under review.