Analyst Mistry says palm oil prices will be pressured until production is reduced.

Dorab Mistry, an industry analyst, said that Malaysian palm futures will remain under pressure as long as production does not ease.

The benchmark palm-oil contract for March delivery at the Bursa Derivatives Market (BMD) was closed on Friday at 4,043 Ringgit per metric ton, after having fallen to its lowest level in over six months in December.

"Palm Futures on the BMD is under pressure." Fund investors have left the market. This weakness could persist until production declines," Mistry said at a Karachi industry conference.

Mistry predicted in November that palm oils futures would reach 5,500 ringgit per ton from January to March if Indonesia seizes?more plantations? and moves towards implementing 50% biodiesel, also known as B50.

Mistry stated that the bullish outlook for palm oil has changed since then. Production rose by 1 million tonnes more than anticipated, inventories grew, and biofuel demand was disappointing, particularly in?the United States.

He said that palm oil stocks in Malaysia - the second largest producer of palm oil in the world - are expected to reach a record high of?3 millions metric tons. This is up from an earlier estimate of?2 million metric tonnes, due to a robust production since October.

He said that the recent price correction made palm oil "competitive" with other vegetable oils such as sunflower oil and soyoil, but that demand remains low.

Mistry stated that Malaysia's palm-oil production will likely?decline' this year, after exceeding 20 million tons in 2025. Indonesia's land seizure policies could also affect output in the second halves of 2026. (Reporting and editing by Tom Hogue; Rajendra Jadhav)

(source: Reuters)