Palm oil prices rise on Indian purchases but still set to lose money each week

Malaysian palm futures reversed their early losses on the Friday as India, the world's largest edible oil importer, increased purchases in the last two days. However, they are still expected to decline by a significant amount each week.

By midday, the benchmark contract for palm oil delivery in March on the Bursa Derivatives Market of Malaysia had gained 0.48% and reached 4,354 Ringgit ($968.63).

This week, the contract has fallen by 5.84%.

Anilkumar bagani, research head at Mumbai-based Sunvin Group, said that the futures were able to overcome the weakness of early trade because India, which is the largest edible oil importer on the planet, increased palm oil purchases. Around 100,000 metric tonnes of palm oil was purchased in the first two days of 2025.

He said that India's palm-oil coverage for the first three quarters of 2025 was "dangerously" low.

Dalian's palm oil contract and soyoil contract both fell by 2.82%. Chicago Board of Trade Soyoil Futures rose 0.52%.

Indonesia is yet to implement the higher blend of biodiesel that was planned for January 1, as industry participants are awaiting technical regulations. This has caused confusion among palm oil dealers.

AmSpec Agri Malaysia reported a 2.5% decline in December exports of palm oil products, while Intertek Testing Services reported a 7.8% decrease.

Oil prices continued to rise after reaching their highest level in over two months on Friday, amid hopes governments around the globe may increase policy support for economic growth which would lift fuel consumption.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's currency fell by 0.42% versus the U.S. Dollar, making it cheaper for buyers who hold foreign currencies.

A projection analysis suggests that palm oil could fall between 4,231 and 4,263 ringgit a ton.

(source: Reuters)