(Dec 16): Palm oil fell below RM4,000 a tonne, touching its lowest level in three weeks, as it tracked weakness in soybean oil and faced pressure from dull exports out of Malaysia.

Soybean oil, palm’s closest rival in fuel and food markets, closed 1.2% lower on Monday after declining for three days. Prices of the oilseed also fell as much as 0.9% overnight and touched the lowest in more than six weeks, as traders continue to watch whether China will meet a target of buying 12 million tonnes of US crop by year’s end.

Weak demand for palm oil further pressured prices as Malaysia’s exports for the first half of December fell 16% month-on-month, according to Intertek Testing Services.

“I suspect demand might not be as strong as the market anticipates” in the upcoming festive season, said Budiman Suwardi, head of treasury and markets at Prime EcoHarvest Commodities. He added the rains in Southeast Asia would also be a factor to monitor through the end of the year, though they have not yet had a major impact on production and logistics.

Meanwhile, a strengthening ringgit is set to beat its Asian peers for a second straight year, with some strategists expecting the outperformance to extend into 2026, making the ringgit-priced tropical commodity less attractive for overseas buyers.

Prices

• Palm for February delivery on Bursa Malaysia Derivatives drops as much as 0.9% to RM3,971/tonne.
• Palm futures as of midday break RM3,985 ringgit/tonne; -11% YTD.
• Soybean oil for March in Chicago drops 0.6% to 49.7c/lb.
• Refined palm oil for May on Dalian Commodity Exchange -1.2% to 8,394 yuan/tonne.
• Soybean oil for May -1% to 7,864 yuan/tonne.
• Soybean oil’s premium over palm ~US$120/tonne vs average of ~US$89 in past year: data compiled by Bloomberg.
• Palm’s premium over gasoil ~US$355/tonne vs average of ~US$310 in past year: data compiled by Bloomberg.

Source: The Edge Malaysia