Crude palm oil (CPO) futures on Bursa Malaysia Derivatives are projected to trade slightly lower this week, influenced by recent export weaknesses, according to palm oil trader David Ng. He observed that demand from India has been consistently low in recent weeks but anticipates improvement by week’s end. “We expect the commodity to trade between RM4,500 and RM4,700 per tonne,” Ng stated.
Jim Teh, senior palm oil trader at Interband Group of Companies, projects CPO prices to range between RM4,100 and RM4,300 per tonne. This forecast comes despite the Malaysian Palm Oil Board (MPOB) reporting a 2.9% decrease in processed palm oil stockpiles to 790,817 tonnes in January, down from 814,426 tonnes the previous month. Total palm oil stocks also declined by 7.55% to 1.58 million tonnes from 1.71 million tonnes in December.
On a week-to-week basis, the February 2025 spot-month contract decreased by RM56, settling at RM4,725 per tonne. The physical CPO price for February South also saw a reduction of RM20, closing at RM4,800 per tonne.
In January, India’s palm oil imports reached a near 14-year low, primarily due to refiners opting for more affordable soyoil, as reported by the Solvent Extractors’ Association of India. Imports fell by 45% from December, totaling 275,241 metric tons—the lowest since March 2011.
Despite recent flood disruptions in several Malaysian states, the MPOB indicated that the country’s palm oil production remains resilient. While heavy rainfall and flooding have caused some harvesting challenges, the overall impact on production is considered manageable.
Analysts suggest that Malaysia’s palm oil exports in January 2025 decreased by 12.94% to 1.17 million tonnes from 1.34 million tonnes in December 2024. This decline is attributed to reduced demand from key markets and increased competition from alternative oils.
Looking ahead, market participants will monitor demand trends from major importers and assess how production dynamics influence CPO futures in the coming weeks.
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