FX.co ★ Palm Oil Eases from 1-Month High

Malaysian palm oil futures settled at MYR 4,060 per tonne on Wednesday, retreating slightly from the recent one-month high of MYR 4,090 reached two sessions earlier. This movement is attributed to a downward shift in crude oil benchmarks, which consequentially affects demand for biofuel alternatives. Energy benchmarks declined after four consecutive sessions of gains as markets assessed the potential impact of geopolitical tensions in Iran on the supply of oil from the region, thereby influencing the demand for biodiesel feedstock among Southeast Asian consumers. This crude oil volatility coincided with Indonesia's anticipation of implementing its B50 biodiesel mandate, which hinges on the price differential between crude oil and crude palm oil. Meanwhile, cargo surveyors indicated that palm oil shipments from Malaysia increased by 18% to 29% in the first ten days of January compared to the previous month. Additionally, Chinese imports saw a significant surge in December, marking the largest increase in three months, a reflection of heightened year-end demand.