Palm oil prices rose on Tuesday

According to David Ng, a trader at Iceberg X in Kuala Lumpur, palm oil prices have risen amid rising oil prices and escalating tensions in the Middle East. Uncertainty is growing as Iran has effectively closed the Strait of Hormuz, through which approximately 20% of global oil supplies pass daily. Ng forecasts palm oil prices to strengthen above 4,100 ringgit per tonne, with resistance at 4,280 ringgit.

Malaysian palm oil futures rose for a third straight session on Tuesday, reaching their highest level in nearly four weeks, driven by rising prices of competing vegetable oils in the Dalian and Chicago markets, firmer oil prices, and lower inventory forecasts.

The benchmark palm oil contract for May delivery, FCPO1, on the Bursa Malaysia Derivatives Exchange, rose 39 ringgit, or 0.94%, to 4,186 ringgit (US$1,061.63) per metric tonne at the close.

“Palm oil futures on Bursa Malaysia opened higher, following firming price spreads for competing oilseeds,” a Kuala Lumpur-based trader said, adding that rising energy prices amid ongoing Israeli and US strikes on Iran also supported prices.

The most-active Dalian soybean oil contract rose 1.16%, while the FCPO1 palm oil contract gained 1.6%. Soybean oil on the Chicago Mercantile Exchange rose 1.34%.

Palm oil prices are tracking the price of competing edible oils as it battles for share in the global vegetable oil market.

Malaysia’s palm oil inventories are expected to decline for the second consecutive month in February, reaching a four-month low, as a seasonal decline in production outweighed a slowdown in exports, a Reuters poll showed on Tuesday.

India’s palm oil imports rose 10.1% in February to a six-month high, according to five dealers, as a widening discount to competing oils prompted refiners to increase purchases and reduce sunflower oil imports.

According to Intertek Testing Services and independent inspection company AmSpec Agri Malaysia, Malaysian palm oil exports fell between 21.5% and 25.5% in February.

Brent crude futures reached their highest level since July 2024 amid the escalating US-Israeli conflict with Iran and threats to shipping through the Strait of Hormuz, fueling concerns about supply disruptions from the key Middle East region.

Higher oil prices make palm oil a more attractive biodiesel feedstock option.

Palm oil FCPO1 may test the 4,121 ringgit per metric tonne support level, with a break below it likely triggering a decline to the 4,078-4,098 ringgit range, according to Reuters technical analyst Wang Tao.

Tags: prices, palm oil