Palm up in anticipation of lower production and improved exports

The market for Malaysian palm oils futures closed higher on Tuesday as the anticipation of a sharp decline in production, and a stronger export demand, supported the market.

The benchmark palm-oil contract for April delivery on the 'Bursa Malaysia Derivatives exchange gained 28 ringgit or 0.69% to 4,095 Ringgit ($1,010.61) per metric ton.

Paramalingam Supramaniam of the brokerage Pelindung Bestari in Selangor said that traders expect a drop in output between 15% and 17% by January, but exports are up, signaling a strong demand.

He said that if these two variables continued until March, the end stock could be significantly reduced.

Exports of Malaysian palm oil products rose between 8.64% to?11.4% in January from the previous month, according to cargo surveyors.

Dalian's most-active palm oil contract increased by 1.2%, while the soyoil contract grew by 0.43%. Chicago Board of Trade soyoil prices were down by 0.04%.

As palm oil competes to gain a share in the global vegetable oils market, it tracks the price changes of its rival edible oils.

Investors watched U.S. President Donald Trump threaten higher tariffs against European states over his desire to acquire Greenland. Meanwhile, expectations of a stronger global economy and better than expected economic data from China helped to keep oil prices steady.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit?of trade' remained unchanged in relation to the U.S. dollar.

A poll shows that Malaysian crude palm futures prices are likely to be?slightly lower than last year in 2026, as a result of a stronger supply by major producers, and a subdued demand for biofuels, which is putting downward pressure.

(source: Reuters)