JAKARTA: Malaysian palm oil futures fell on Wednesday and were headed for a loss in 2025, a volatile year beset by geopolitical uncertainties and tariffs.
Traders are, however, optimistic that the upcoming festive demand and a production decline in Indonesia will provide good support for prices. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 19 ringgit, or 0.47 per cent, to 4,051 ringgit (US$998.52) a tonne by the midday break.
The futures have booked an 8.93 per cent drop so far in 2025. Last year it had gained almost 20 per cent.
“Palm witnessed a very volatile market this year, with varied uncertainties in global macro scenarios and tariffs and moved from the highs of about 4,650 to the lows of 3,725 ringgit,” said Sandeep Singh, founder of a Kuala Lumpur-based consulting and trading company, The Farm Trade.
With the upcoming Ramadan and Eid festivals and an expected production decline in Indonesia, prices could find good support at about 3,900 ringgit, he said.
He, however, warned that 2026 could still be volatile from changing global economic scenarios, currency fluctuations and crude oil prices. Dalian’s most-active soyoil contract rose 0.03 per cent, while its palm oil contract fell 0.05 per cent. Soyoil prices on the Chicago Board of Trade were down 0.16 per cent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Indonesia has set its crude palm oil reference price at US$915.64 per tonne for January, down from December’s US$926.14 per tonne, according to a Trade Ministry regulation.
Oil prices were little changed on Wednesday but are set to fall more than 15 per cent for 2025, as supply outpaced demand in a year marked by wars, higher tariffs and OPEC+ output and sanctions on Russia, Iran and Venezuela.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.3 per cent against the dollar, making the commodity cheaper for buyers holding foreign currencies. Palm oil FCPOc3 may retest support at 4,044 ringgit per tonne, a break below which could trigger a fall into a range of 3,964 ringgit to 4,008 ringgit, Reuters technical analyst Wang Tao said.
Source: New Straits Times
