Palm oil price declines on profit-taking after weekly gains

Malaysian palm oil futures closed lower on Monday, October 26, as traders took profits following gains over the previous week. The January 2027 contract on Bursa Malaysia Derivatives fell by 24 ringgit, or 0.5%, to MYR 4,793 (approximately $1,175) per ton. The decline extended across all major futures contracts, reflecting cautious market sentiment after the recent increase in palm oil prices.

Meanwhile, stronger Malaysian exports continue to provide fundamental support to the market. According to estimates from independent cargo surveyors AmSpec, SGS and Intertek, Malaysia’s palm oil shipments increased by 58.5–78.4% during October 1–20 compared with the same period in September. This growth indicates a recovery in international demand and creates conditions for a gradual reduction in accumulated stocks. Expectations of a seasonal decline in production also provide additional support. At the same time, higher crude oil prices could make palm oil more attractive as a feedstock for biodiesel production.

Despite stronger exports, Malaysia’s substantial palm oil stocks continue to limit the potential for further price increases. Inventories stood at 3.51 mln tons in September 2026, maintaining pressure on the market. Meanwhile, demand from China and India remains cautious due to current price levels. Market participants expect additional purchases from Pakistan, the Middle East, the European Union and the United States, although prospects for reducing inventories will depend on actual export volumes in the coming weeks.

Trading activity on Bursa Malaysia also declined noticeably on October 26. Trading volume for the January 2027 contract dropped by 34.4%, from 32,125 to 21,074 contracts, while open interest fell by 8.9% to 90,254 contracts. The simultaneous decline in trading volume and open positions reflects reduced market participation following the recent price rally. This may indicate that profit-taking is outweighing the opening of new positions amid uncertainty over future price movements.

According to market analysts, the nearest technical resistance level for palm oil futures remains at MYR 4,800/t, while support is estimated at approximately MYR 4,600/t. A break above the resistance level could create conditions for renewed price gains, although high Malaysian inventories and cautious demand from major importers remain limiting factors.

Tags: Malaysia, palm oil