FX.co ★ Palm Oil Under Pressure to Begin 2026 Trading

On the first trading day of 2026, Malaysian palm oil futures experienced a decline of approximately 1%, settling at around MYR 4,000 per tonne. This downturn was largely attributed to diminished exports at the close of the year. Cargo surveyors reported a 5.2%–5.8% decrease in December shipments compared to November, intensifying concerns over demand. In anticipation of December's production figures, market caution grew, especially in light of November's output reduction of 5.3% month-on-month to 1.94 million tonnes. Meanwhile, Indonesia, the leading palm oil producer, adjusted its crude palm oil reference price for January to USD 915.64 per tonne, down from USD 926.14, signaling a softened pricing environment. However, losses were somewhat mitigated by signs of a demand uptick from India, the world’s largest palm oil importer, as November saw a modest rise in imports with refiners taking advantage of lower prices. Faced with trading challenges in the EU, Malaysia has been concentrating on expanding its export markets to Africa and the Middle East. In 2025, palm oil prices saw a significant drop of nearly 9%, following strong gains the previous year, primarily due to weaker crude prices, weather-related disruptions, and stricter sustainability regulations in major markets.