Palm Oil Extends Gains on Geopolitical Tailwinds

Malaysian palm oil futures jumped almost 1.5% on the first trading day of March, hovering around MYR 4,100 per tonne, boosted by a weaker ringgit and firmer edible oil prices on the Dalian and Chicago markets. A rally in crude oil prices amid mounting Middle East tensions also supported sentiment. In top supplier Indonesia, authorities raised the crude palm oil export levy to 12.5% of the reference price, up from 10%, to fund its biodiesel mandate, a move expected to tighten supply. Demand signals were upbeat, with palm oil imports in India, the world's largest consumer, surging 51% mom in January to a four-month high and boosting hopes for 2026 buying of up to 800,000 tonnes. However, gains were capped by weak exports, as cargo surveyor Intertek noted Malaysian shipments fell 21.5% in February to 1.15 million tonnes, despite seasonal demand ahead of Eid al-Fitr. Investors now await the February PMI in key buyer China, with concerns that the Spring Festival slowed economic activities.

Malaysian palm oil futures hovered around MYR 4,020 per tonne on Friday, rebounding from a sharp drop in the prior session amid firmer soyoil prices in Dalian and Chicago markets. Demand signals also improved, as top buyer India saw palm oil imports surging 51% mom in January to a four-month high. The rebound strengthened expectations that the country's demand could recover in 2026 amid better price competitiveness, with purchases potentially reaching 800,000 tonnes. Despite the uptick, the contract is still heading for a weekly loss of about 1.7%, bringing the monthly fall to roughly 4.9%. The weakness reflects sluggish exports, even with seasonal demand from Ramadan and the upcoming Eid al-Fitr festival. Cargo surveyors noted Malaysian shipments for February 1–25 fell between 12.1% and 16.1% from the same period in January. Rising stockpiles and output also capped gains, while the Malaysian Palm Oil Council expects prices to settle around the MYR 4,000–4,300 range in March.

Malaysian palm oil futures dipped below MYR 4,050 per tonne on Thursday, extending the previous session’s subdued tone as losses in Dalian palm oil and Chicago soyoil weighed on sentiment. Prices hovered around a one-week low, pressured by a firmer ringgit and weak export performance, despite seasonal demand linked to Ramadan and the upcoming Eid al-Fitr festival. Cargo surveyors estimated that Malaysian palm oil shipments for February 1–25 dropped between 12.1% and 16.1% compared with the same period in January, reinforcing downside pressure. Still, the broader outlook remains mixed. Demand from India, the top buyer, is expected to recover in 2026 amid improved price competitiveness, with imports potentially hitting 800,000 tonnes. Meanwhile, crude oil prices held near multi-month highs amid heightened geopolitical tensions, lending some support to the edible oils complex. The Malaysian Palm Oil Council expects prices to consolidate within the MYR 4,000–4,300 per tonne range in March.