Palm declines for third consecutive weekly drop

Malaysian palm futures declined on Friday. This was the third consecutive weekly decline as traders booked profits after bullish analyst forecasts for next year.

At the close, the benchmark palm oil contract on Bursa Derivatives exchange for December delivery fell 43 ringgit or 0.97% to 4,396 Ringgit ($1,041.95) per metric ton. The contract dropped 0.66% in the past week.

A Kuala Lumpur based trader reported that the palm oil market fell in the afternoon session, as participants mistook analysts' bullish forecast for next year for a bearish sign for current prices.

Dorab Mistry, an industry analyst, said that India's edible oils imports are expected to increase by 4.6% in 2025/26 to a new record of 17.1 million metric tonnes, due to the increased purchases of palm oil by the world's biggest vegetable oil buyer.

Thomas Mielke, a leading industry analyst, predicted that palm oil and soybean oil prices would rise between January 2026 and June 2026 by $100-150 per metric tonne due to tighter supplies.

The trader said that the lack of a decision from the United States or China regarding a trade agreement for soybean oil also kept buyers away.

Dalian's soyoil contract with the highest volume fell 0.22% while palm oil contracts gained 0.24%. Chicago Board of Trade soyoil prices were down by 0.28%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

Oil prices rose, on course for a weekly gain of more than 4%, after Ukraine's attacks against Russia's energy grid prompted Moscow's decision to cut fuel exports.

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

The palm ringgit's trade currency, the dollar, fell by 0.14%, making the commodity more affordable for buyers who hold foreign currencies.

(source: Reuters)