FX.co ★ Palm Oil Retreats After Three-Day Gains

Malaysian palm oil futures fell below MYR 4,180 per tonne on Wednesday, ending a three-session rally, pressured by weaker soyoil prices on both the Dalian and Chicago exchanges. Additional selling emerged as traders booked profits after prices touched their highest level in nearly four weeks.

Market sentiment was further dampened by softer export figures. Cargo surveyors reported that February shipments declined by 21.5%–22.5% from January, despite typically stronger seasonal demand ahead of Eid al-Fitr. In China, a key importing country, official data indicated weaker economic activity in February, in part due to an extended Spring Festival holiday.

Downside pressure was limited, however, by a weaker ringgit, which makes Malaysian palm oil more competitive, and by firmer crude oil prices amid escalating tensions in the Middle East. In India, the world’s largest palm oil consumer, February imports rose 10.1% month-on-month to a six-month high of 844,000 tonnes, supported by a wider price discount to competing vegetable oils.

Meanwhile, a Reuters survey projected that Malaysia’s palm oil inventories likely declined for a second consecutive month in February, falling to a four-month low as seasonal production weakness outweighed the impact of slower exports.