FX.co ★ Palm Oil Dips for 3rd Session

Malaysian palm oil futures declined for the third consecutive session on Thursday, falling below MYR 4,020 per tonne. This downward trend was influenced by weakness in edible oil markets in both Dalian and Chicago, affecting overall market sentiment. Additionally, high inventory levels, nearing multi-year peaks, contributed to the pressure, indicating ample supply despite the usual demand increase ahead of the Lunar New Year and Ramadan. In Indonesia, the leading producer, plans for a mandatory B50 biodiesel blend for this year were abandoned due to technical and funding limitations, maintaining the B40 mandate, which consequently tempered demand prospects. Meanwhile, in the broader energy sector, crude oil prices decreased amid reduced concerns of a potential U.S. strike on Iran, which in turn diminished support for biofuels. Nonetheless, losses were limited by a weaker ringgit and indications of stronger exports, with cargo surveyor reports showing a significant increase of 17.7% to 29.2% in shipments from January 1–10 compared to December. Additionally, demand from India, the largest global importer of palm oil, is anticipated to recover in January after falling to its lowest level in eight months in December.