FX.co ★ Palm Oil Rebounds, Eyes Modest Weekly Gains

Malaysian palm oil futures saw a gain of approximately 1.5%, reaching around MYR 4,050 per tonne on Friday. This rise comes after a three-day decline, as bargain hunters emerged following recent price drops. The increase was further encouraged by stronger edible oil prices in Dalian and Chicago, alongside a boost in exports. Cargo surveyors reported a significant surge in shipments from January 1 to 15, up by 17.5% to 18.6% compared to the previous month. Moreover, demand from India, the largest consumer of palm oil, is anticipated to recover in January after experiencing an eight-month low in December. However, the upward trend was moderated by high inventory levels in Malaysia, which remain near multi-year peaks, despite the seasonal demand leading up to the Lunar New Year and Ramadan. Meanwhile, in Indonesia, plans for a mandatory B50 biodiesel blend were abandoned due to technical and financial challenges, thus maintaining the current B40 mandate. Additionally, Indonesia announced an increase in its crude palm oil export levy from 10% to 12.5%, effective March 1. Despite these developments, palm oil contracts are poised for a second consecutive weekly increase, albeit a modest rise of about 0.3%.