KUALA LUMPUR: Malaysian palm oil futures reversed earlier losses to end on a slightly higher note on Thursday, despite rising output expectations and concerns over demand from key buyer India.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange rose 2 ringgit, or 0.05%, to 4,126 ringgit ($976.80) a metric ton at the close. The contract fell 0.31% in the previous session.
“There is a risk of Malaysian palm oil production crossing 20 million tons this year and Indonesia’s palm oil production has also seen double-digit growth so far,” said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group, adding that a crude oil selloff and the stronger ringgit were further pressuring palm oil prices.
Malaysia’s crude palm oil production is expected to surpass 20 million tons for the first time in 2025, supported by favourable weather, improved labour supply, and higher-yielding new plantations, trade and industry officials told Reuters.
Indonesia’s palm oil output for January to September was more than 43 million tons, an annual increase of 11%, Indonesia Palm Oil Association (GAPKI) chair Eddy Martono said.
India’s palm oil imports slid to their lowest level in five years during the 2024/25 marketing year, while purchases of soyoil soared to a record high as a widening price premium made palm oil less attractive to buyers, a leading industry body said.
Dalian’s most-active soyoil contract rose 0.6%, while its palm oil contract edged 0.09% higher. Soyoil prices on the Chicago Board of Trade were up 0.4%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices edged down, extending losses from the previous session, as a report showing rising crude inventories in the United States reinforced concerns about global oversupply.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit palm’s currency of trade, strengthened 0.17% against the dollar, making the commodity more expensive for buyers holding foreign currencies.