Palm oil prices fall due to weather and uncertainty in demand
Malaysian palm futures continued to fall for a fourth session in a row on Thursday, after an uncertain demand created pressure to sell. This was topped off by unpredictable weather conditions which are making production more volatile.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery had fallen 14 ringgit or 0.31% to 4,442 Ringgit ($1,051.61) per metric ton.
The uncertainty of demand has exacerbated the pressure on sellers today. The volatility will continue to be high, as we move into unpredictabile conditions in weather and production for the first quarter 2026," Paramalingam Supramaniam said.
Dalian's soyoil contract with the highest volume of trading fell by 0.51% while palm oil contracts dropped by 1.3%. Chicago Board of Trade soyoil prices were up by 0.38%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
Energy Minister Bahlil lahadalia announced on Wednesday that Indonesian biodiesel consumed from January to September was 10.57 million kilograms. This is an increase of nearly 10% compared to 9.61 million kilograms a year ago.
Oil prices rose 3% on Friday, continuing gains from the previous day, as Indian buyers began reviewing their Russian oil purchase after the U.S. placed sanctions on Rosneft, and Lukoil, major suppliers, over the Ukraine War.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit, the currency of trade for the company, has strengthened by 0.02% versus dollar. The ringgit is stronger, making the commodity more costly for foreign currency buyers.
Technical analyst Wang Tao stated that palm oil could stabilise between 4,401 to 4,409 Ringgit per metric tonne and then bounce to the range of 4,447 to 4,471 Ringgit.
(source: Reuters)
