Palm Oil Edges Lower, Poised for First Weekly Gain in Three

Malaysian palm oil futures eased to MYR 4,110 per tonne on Friday after a strong rally in the prior session, weighed down by weaker Chicago soyoil and a firmer ringgit. Trading was relatively muted with China’s Dalian exchange shut for the Spring Festival. Meanwhile, export concerns deepened after AmSpec Agri Malaysia reported that February 1–20 shipments of Malaysian palm oil dipped 12.6% from January, reflecting softer demand even as Ramadan has kicked off, followed by Eid al-Fitr celebration. Still, futures are set for a weekly gain of 1.4%, snapping two weeks of losses. Support came from the top buyer India, where January palm oil imports surged 51% mom to a four-month high, while Malaysian inventories fell 7.7% and production dropped 13.8%, tightening supply. In Indonesia, the world’s top producer, a new U.S. trade pact preserved a reduced 19% tariff, well below the initially proposed 32%, and granted tariff-free access for some commodities, including palm oil.

Malaysian palm oil futures jumped around 2% to around MYR 4,100 per tonne on Thursday, bouncing back from the prior session’s weakness as trading resumed after the two-day Lunar New Year break. Support came from a weaker ringgit and firmer soyoil prices on the Chicago market, while China’s Dalian exchange remained closed for the Spring Festival. Buying was also driven by bargain hunting after prices fell to a four-week low ahead of the holiday. On the demand side, India, the top importer, raised palm oil purchases by 51% mom in January to a four-month high, recovering from December’s sharp decline. Meanwhile, industry data showed inventories dropped 7.7%, and production slid 13.8% in January, lending further support. However, gains were capped by weaker export prospects. Cargo surveyors estimated shipments for February 1–15 fell between 11.2% and 14.9%, highlighting near-term demand concerns during Ramadan and the upcoming Eid-ul-Fitr celebration.

Malaysian palm oil futures hovered below MYR 4,050 per tonne on Monday, reversing modest gains from the prior session amid a stronger ringgit and softer exports. Cargo surveyors estimated Malaysian palm oil shipments for February 1–15 fell between 11.2% and 14.9% mom, reinforcing concerns over near-term demand. Prices held around their lowest levels in four weeks, with trading subdued ahead of the Lunar New Year break. Markets in Malaysia will be closed Tuesday and resume trading Thursday. The Dalian market is shut for the holidays until next week, while the Chicago exchange is also closed for a public holiday, limiting external cues. Still, some supportive factors emerged. India, the top buyer, boosted palm oil imports by 51% mom in January to a four-month high after December’s sharp drop. Meanwhile, monthly data from the industry regulator showed inventories fell 7.7%, and production dropped 13.8% in January, suggesting a tighter supply that could help cushion further downside.