Malaysian palm oil futures fell more than 1% on Friday

Malaysian palm oil futures fell more than 1% on Friday, marking their second consecutive weekly decline, as weakening vegetable oil competitors and a stronger ringgit weighed on prices.

Palm oil prices fell below 4,000 ringgit due to concerns about rising inventories, says David Ng, a trader at Iceberg X in Kuala Lumpur. Investors are also concerned about weak demand, he adds. Ng sees support for crude palm oil futures at 3,850 ringgit per tonne, with resistance at 4,050 ringgit per tonne. K

The benchmark FCPO1 palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 74 ringgit, or 1.86%, to 3,906 ringgit (US$958.76) per metric ton, its lowest closing price since June 12. The contract is down 2.79% this week.

Crude palm oil prices were mainly pressured by weakness in the competing oilseeds market, where Dalian palm olein oil remained in the red after an overnight decline, a Kuala Lumpur trader said.

“The stable ringgit exchange rate around 4.08 is also holding buyers back,” the trader added.

The ringgit strengthened 0.17% against the dollar, making the commodity expensive for buyers holding foreign currencies.

The most actively traded soybean oil contract in Dalian fell 1.41%, while the palm oil contract fell 1.33%. Soybean oil prices on the Chicago Mercantile Exchange fell 0.23%.

Palm oil prices are following those of competing edible oils as it fights for share in the global vegetable oil market.

Oil prices fell and appeared poised to decline for a second consecutive week, as potential supply overhang and the prospect of a peace agreement between Russia and Ukraine offset concerns about disruptions caused by the blockade of Venezuelan oil tankers. O/R

Lower oil futures prices make palm oil a less attractive feedstock option for biodiesel production.

According to the Indonesian Palm Oil Association, Indonesia’s palm oil inventories at the end of October fell 10% from the previous month to 2.33 million metric tons, despite increased production.

Two weeks ago, Indonesia began road testing biodiesel containing 50% palm oil (a blend known as B50), and mandatory use of B50 is likely to begin in the second half of 2026, Energy Minister Bahlil Lahadalia said.

(US$1 = RM4.0740)

Tags: prices, palm oil