FX.co ★ Palm Oil Trades Lower to Kick Off the Week

Malaysian palm oil futures dipped below MYR 4,070 per tonne on Monday, reversing the previous session's rally due to profit-taking and a stronger ringgit. Market sentiment weakened after China, a significant importer, reduced import tariffs on Canadian canola from 84% to 15%, which increased the possibility of cheaper alternatives and heightened competition in the edible oil market. December saw soft consumer demand in China, highlighting a fragile economic recovery and resulting in the country’s weakest fourth-quarter GDP growth in three years, despite ongoing stimulus efforts. In Indonesia, the leading supplier, the government abandoned its plans to implement a B50 biodiesel mandate this year, dampening demand forecasts. Additionally, traders exercised caution ahead of the export estimates for January 1–20, which are expected to be released later this week. Nevertheless, potential losses were mitigated by optimism surrounding seasonal demand fueled by the Lunar New Year and Ramadan, along with anticipated lower production in the upcoming months. Meanwhile, demand from India, the largest buyer globally, is projected to rebound in January after hitting an eight-month low in December.