FX.co ★ Palm Oil Extends Declines

Malaysian palm oil futures declined by over 1%, falling to below MYR 4,150 per tonne, marking a second consecutive session of losses. A stronger ringgit and weaker performances of edible oils in the Chicago and Dalian exchanges negatively influenced market sentiment. Adding to the downtrend were supply concerns, highlighted by a Reuters survey that indicated Malaysian inventories likely reached a 6-1/2-year peak in November. Export figures also suffered, with Intertek reporting a 19.7% month-on-month decline in November shipments. Furthermore, operational challenges loomed due to a land dispute in Terengganu state, posing a potential threat to production disruption. In China, a key consumer, the absence of new stimulus measures as the year-end approaches, despite ongoing weaknesses in the manufacturing and services sectors, further dampened the outlook. However, the losses were somewhat mitigated by the anticipation of increased seasonal demand in preparation for the Lunar New Year and Ramadan in early 2026. In India, the leading buyer, November imports saw a slight uptick as declining palm oil prices motivated refiners to shift from more expensive soyoil and sunflower oil.