FX.co ★ Palm Oil Extends Strength

Malaysian palm oil futures remained above MYR 4,150 per tonne on Tuesday, maintaining their upward trajectory from the previous session and recovering from a four-month low experienced last week. The sentiment was bolstered by a weaker ringgit, coupled with stronger Dalian oils, following reports from Reuters that COFCO, China's state-owned trading enterprise, acquired at least 14 cargoes of U.S. soybeans for the December-January period. However, gains were somewhat constrained after the Malaysian Palm Oil Board disclosed a reduced reference price for crude palm oil for December. In India, the largest consumer of palm oil, imports in October declined to a five-month low as buyers preferred soybean oil due to higher prices for palm oil. Import projections for 2024/25 are down 16%, reaching a five-year low of 7.56 million tonnes. Concurrently, cargo surveyors indicated that Malaysian palm oil product exports between November 1–15 decreased by 10% to 15.5% compared to the previous month. Additional downward pressure stemmed from regulatory uncertainties in leading producer Indonesia, such as land seizure issues and the biodiesel mandate debate.