PALMOILMAGAZINE, KUALA LUMPUR — Malaysian crude palm oil (CPO) futures traded in a narrow range on Wednesday (12/17), as persistent concerns over weak export performance and elevated inventories continued to cap prices, prompting cautious sentiment among market participants. Still, support from global energy markets and rival vegetable oils helped limit further downside.
According to Reuters report, the benchmark March CPO contract on the Bursa Malaysia Derivatives Exchange slipped 5 ringgit, or 0.13 percent, to 3,957 ringgit per metric ton at the midday break. The decline extended a losing streak into a third consecutive session, with cumulative losses of around 1.4 percent.
Market players said fundamental pressures remain dominant, particularly the lack of a meaningful recovery in Malaysia’s exports and relatively high domestic stock levels. These factors have constrained upside potential, even as broader market support prevents a sharper sell-off.
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“Sluggish exports and large inventories are still the main drags on prices. However, the rebound in Chicago soyoil and stronger crude oil prices have helped keep losses in check,” said David Ng, a trader at Kuala Lumpur-based Iceberg X Sdn Bhd.
Elsewhere in the vegetable oil complex, price movements were mixed. The most-active soyoil contract on the Dalian Commodity Exchange fell 0.73 percent, while Dalian palm oil futures declined 0.97 percent. In contrast, soyoil prices on the Chicago Board of Trade edged up 0.19 percent, providing some support to palm oil.
Global crude oil prices also played a role in shaping sentiment. Prices jumped more than 1 percent after U.S. President Donald Trump announced a “total and comprehensive blockade” on sanctioned oil tankers operating in and out of Venezuela. The move reignited geopolitical tensions and added uncertainty to global energy supply prospects.
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Rising crude oil prices have enhanced the appeal of CPO as a biodiesel feedstock, as production margins become more competitive. On the currency front, the Malaysian ringgit eased about 0.02 percent against the U.S. dollar, making palm oil slightly cheaper for buyers using other currencies.
From a policy perspective, the U.S. Environmental Protection Agency (EPA) said it would finalize biofuel blending mandates for 2026–2027 in the first quarter of next year. The decision is closely watched by the market, given its potential impact on global vegetable oil demand.
Meanwhile, data from the European Commission showed that European Union soybean imports for the 2025/2026 season, which began in July, reached 5.65 million metric tons by mid-December—down 13 percent from the same period a year earlier. EU palm oil imports also fell 12 percent to 1.35 million tons, reflecting softer demand across the bloc.
Looking ahead, CPO prices are expected to remain driven by a combination of core fundamentals—exports and inventories—and external factors, including energy market dynamics, biofuel policies, and price movements of competing vegetable oils in the global market. (P3)
