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Malaysian CPO Futures Fall Amid Weak Exports, Stronger Ringgit

22 Jan 2025 12:10 pm
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MUMBAI, 22 Jan (Commoditiescontrol): Malaysian crude palm oil (CPO) futures ended a three-session rally on Wednesday, pressured by weaker export demand and a stronger Malaysian ringgit.

The benchmark April palm oil contract on the Bursa Malaysia Derivatives Exchange dropped by 46 ringgit, or 1.08%, to 4,214 ringgit ($948.46) per metric ton by the midday break.

Data from cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia revealed that palm oil exports from January 1 to 20 were estimated to have declined by 18.2% to 23%, reflecting softer demand in key markets.

Adding to the downward pressure, the Malaysian ringgit strengthened by 0.74% against the U.S. dollar, making palm oil more expensive for foreign buyers.

In the global vegetable oils market, mixed trends were observed. While Dalian's most active soyoil contract rose by 0.16%, its palm oil contract declined by 0.47%. On the Chicago Board of Trade, soyoil edged up 0.09%. As palm oil competes directly with rival edible oils, price fluctuations in the global market often impact its demand and pricing.

Looking ahead, Malaysian palm oil futures are expected to average higher in 2025 compared to last year, according to a Reuters poll. This projection is supported by Indonesia’s increased consumption of palm oil-based biodiesel, driven by government subsidies. However, competition from cheaper vegetable oil alternatives may limit the price gains.

Notably, Indonesia’s palm oil fund agency has resumed its disbursement of funds for biodiesel subsidies and oil palm replanting programs after a temporary pause during a reorganization. This move is likely to bolster demand for palm oil in the biodiesel sector, potentially influencing future price trends.

With export data and currency movements continuing to weigh on the market, the outlook for Malaysian CPO remains a delicate balance of opportunities and challenges.



(By Commoditiescontrol Bureau; +91 98201 30172)


       
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