Palm oil futures prices soften on profit booking

25-Dec-2024 11:23 AM

Palm oil futures in Malaysia saw a decline due to profit booking by traders and investors ahead of the Christmas holidays.

The benchmark price of crude palm oil (CPO) for March delivery on the Bursa Malaysia Derivatives (BMD) Exchange dropped by 28 ringgit, or 0.62%, closing at 4514 ringgit per tonne.

This dip followed fluctuations earlier in the day, with a noticeable downtrend emerging by the midday break.

Earlier in the week, on December 23, palm oil futures had risen following Indonesia's announcement of a potential B40 biodiesel program, which could require 40% palm oil in biodiesel production starting in 2025.

However, traders became cautious due to the year-end book closure and market uncertainties. In fact, despite a significant 2.46% rise in futures on the first trading day of the week, palm oil prices had generally trended downward in the previous week.

International markets showed mixed reactions: In China, soybean oil futures rose by 0.87% on the Dalian Commodity Exchange, while palm oil futures increased by 1.24%. In contrast, soybean oil futures on the Chicago Board of Trade (CBOT) fell by 1.06%.

Looking ahead, palm oil production in Malaysia is expected to be impacted by severe flooding, which could tighten supply and potentially support higher prices in the future.