FX.co ★ Palm Oil Extends Strength

Malaysian palm oil futures advanced by nearly 1% to surpass MYR 4,100 per tonne on Wednesday, maintaining momentum from the previous session. This increase was bolstered by a depreciating ringgit, which enhanced export competitiveness, coupled with strengthening edible oil prices on the Dalian and Chicago exchanges. The upward trend is also supported by forecasts indicating a potential 15%–17% decline in January production, reflecting seasonal demand surges ahead of the Lunar New Year and Ramadan festivities. In India, the largest purchaser, import levels are anticipated to recover following a 20% downturn in December, marking the lowest volume since April 2025, attributed to reduced year-end demand and increased acquisition of alternative oils. Meanwhile, export statistics revealed that Malaysian shipments from January 1 to 20 experienced an 8.64% to 11.4% growth compared to the previous month. The Malaysian Palm Oil Council anticipates February prices to fluctuate between MYR 4,000 and MYR 4,300, supported by typical seasonal production declines. Nonetheless, gains were constrained as Indonesia abandoned its plan for a B50 biodiesel mandate this year, alongside a sharp drop in crude oil prices due to expected stockpile increases and alleviated supply concerns.