Palm oil notches marginal weekly gains on Malaysian production decline

Malaysian palm oil futures reversed losses on Friday to end higher, and booked a marginal weekly gains after data from the Malaysian Palm Oil Association showed a decline in production.

The benchmark palm oil contract FCPO1! for April delivery on the Bursa Malaysia Derivatives Exchange closed up 0.55% to 4,213 ringgit ($962.97) a metric ton.

For the week, the contract rose 0.55%, after falling about 4.6% in the previous week.

“The MPOA (Jan) 1 to 20 production data showed a 13% decline, supporting prices,” a Kuala Lumpur-based trader said.

Market participants may trade cautiously ahead of presentation at Globoil sugar and bioenergy conference in Bangkok, the trader said.

Dalian’s most-active soyoil contract (DBYcv1) lost 0.83%, while its palm oil contract CPO1! slipped 0.67%. Soyoil on the Chicago Board of Trade ZL1! was down 0.82%.

Palm oil tracks price movements in rival edible oils as it competes for a share of the global vegetable oils market.

Indonesia’s November palm oil stocks rose 3.2% from the previous month as slowing exports offset a decline in production, data from Indonesian palm oil association GAPKI showed.

Malaysian palm oil is likely to trade around 4,000 ringgit per ton in 2025, except for a brief rise up to 4,800 ringgit in February, amid stiff competition from soyoil, industry analyst Dorab Mistry said.

A Reuters poll showed Malaysian CPO futures are expected to average higher in 2025, as top producer Indonesia boosts palm oil-based biodiesel consumption, although competition from cheaper rivals is expected to limit the upside.

Exports of Malaysian palm oil products for Jan. 1-20 are estimated to have fallen between 18.2% and 23%, according to cargo surveyors Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Source: Reuters