FX.co ★ Palm Oil Rises After Two-Session Slide

Malaysian palm oil futures experienced an uptick on Monday, trading just above MYR 4,000 per tonne after experiencing declines over the previous two sessions. This sentiment boost can be attributed to a weaker ringgit and stronger Chicago soyoil prices, alongside bolstered demand forecasts as the Lunar New Year and Ramadan approach in February. The market's optimism was further supported by consistent purchasing from India, the largest global importer, which saw a roughly 5% increase in November imports month-on-month, as refiners took advantage of reduced prices. However, gains were tempered by cautiousness ahead of the release of December supply data. In November, Malaysian palm oil production dropped by 5.3% to 1.94 million tonnes, casting uncertainty over short-term output levels. Furthermore, the potential for significant price increases was restrained by Indonesia, the leading producer, reducing its January crude palm oil reference price from USD 926.14 to USD 915.64 per tonne, indicating a softening in regional pricing trends. On the export side, cargo surveyors reported that December palm oil shipments decreased by 5.2–5.8% compared to November shipments. Additionally, geopolitical risks were a concern as traders considered the implications of U.S. military actions in Venezuela.