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Malaysian CPO Futures End Higher but Post Weekly Decline

17 Jan 2025 4:58 pm
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MUMBAI, 17 Jan (Commoditiescontrol): Malaysian crude palm oil (CPO) futures closed higher on Friday but recorded a weekly decline amid weak demand from India, the world's largest buyer, and losses in Dalian vegetable oil markets. The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose by 7 ringgit to settle at 4,193 ringgit per metric ton. Despite the slight recovery, the contract fell to its lowest level in over three months earlier in the session, ending the week with a 4.51% decline.

In China, Dalian's most active soyoil contract dropped 1.17%, and the palm oil contract slipped 0.4%. However, in the U.S., soyoil prices on the Chicago Board of Trade saw a 1.08% increase.

Crude oil prices offered some support to the broader vegetable oil complex. The U.S. benchmark, West Texas Intermediate (WTI), rose $0.63 to $78.43 per barrel, while Brent crude maintained its upward momentum. Despite a slight dip on Thursday due to reduced risks of disruptions in the Red Sea following reports that Yemen's Houthi militia would halt attacks, both benchmarks are on track for their fourth consecutive weekly gains. Year-to-date, Brent has gained 9%, and WTI has climbed 10%.

India's palm oil imports are projected to hit their lowest levels in nearly five years this January. Higher premiums on palm oil compared to alternatives like soybean oil have led Indian buyers to opt for cheaper alternatives, dampening demand and adding pressure to the Malaysian market.

Additionally, Indonesia's decision to temporarily freeze subsidies for its mandatory palm oil biodiesel and re-planting programs has raised concerns. The freeze comes as the country reorganizes its palm oil fund agency, with officials aiming to resolve the transition swiftly.

The Malaysian palm oil market faces a challenging outlook with sluggish demand from key buyers and rising competition from alternative oils. However, crude oil price trends and developments in Indonesia's policy could influence the market in the coming weeks.



(By Commoditiescontrol Bureau; +91 98201 30172)


       
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