Malaysian palm oil futures lower

JAKARTA: Malaysian palm oil futures closed lower on Tuesday as investors booked profit after two sessions of sharp gains on lower palm oil stocks and rising oil prices.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 57 ringgit, or 1.27%, to 4,443 ringgit ($987.33) a metric ton at the close.

“The market is currently navigating a critical juncture, with bullish momentum supported by lower palm oil stocks and rising oil prices. However, concerns over palm oil’s price premium relative to soybean oil are still keeping the market in check,” said Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova.

Malaysia’s palm oil stocks declined for a third straight month in December 2024, falling 6.91% to 1.71 million metric tons, while crude palm oil production fell 8.3% and exports plunged 9.97%, data from the Malaysian Palm Oil Board showed.

Cargo surveyors estimated Malaysian palm oil exports to have fallen between 21.4% and 26.8% during the Jan. 1-10 period from a month earlier. Oil prices eased on Tuesday but remained near four-month highs, as the impact of fresh US sanctions on Russian oil remained the market’s main focus ahead of US inflation data this week. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Meanwhile, India’s palm oil imports in December plunged 41% from a month earlier to a nine-month low, as a rally in prices to a 2-1/2-year high prompted refiners to increase purchases of rival soyoil available at a discount, a leading trade body said. China’s soybean oil and meal futures logged their biggest daily rise since 2023 on Monday, while rapeseed meal and palm oil contracts also jumped, following a rally in the Chicago soy complex after the release of US Department of Agriculture’s crop data. Soyoil prices on the Chicago Board of Trade eased 0.52%.

Dalian’s most active soyoil contract rose 1.2% and its palm oil contract added 0.14%. Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market. The Malaysian ringgit, palm’s currency of trade, rose 0.18% against the US dollar, making the commodity a tad expensive for buyers holding foreign currencies.