Bullish Momentum in Palm Oil Continues

Malaysian palm oil futures edged higher on Tuesday, hovering around MYR 4,150 per tonne and marking the third straight session of gains. A weaker ringgit and firmer edible oil markets in Dalian and Chicago supported sentiment. Also, crude oil’s rally amid escalating U.S.–Israeli tensions with Iran added further support. In top buyer India, February palm oil imports rose 10.1% mom to a six-month high of 844,000 tonnes, due to restocking demand. Meantime, Indonesia, the world's largest producer, reported January crude and refined palm oil exports surging 77.1% yoy, while raising crude palm oil export levy to 12.5% of the reference price to fund its biodiesel mandate. On the export front, however, cargo surveyors noted that February shipments fell between 21.5% to 22.5% from January, despite seasonal demand ahead of the Eid al-Fitr celebration. Caution also lingered ahead of PMI data in China, the key buyer, with concerns that Spring Festival disruptions weighed on business activity.

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.