The edible oil market recorded its first weekly gain in three weeks: energy premiums and a weaker currency supported palm oil prices.
2026-04-24 18:51:49
Malaysian palm oil futures performed strongly on Friday (April 24), closing slightly higher and achieving its first weekly gain in nearly three weeks. Driven by stronger crude oil prices and a continued weakness in the Malaysian ringgit, the market demonstrated resilience in the battle between bulls and bears.
At the close of trading, the benchmark July palm oil contract on the Bursa Malaysia Derivatives Exchange (BMD) settled at $1,159.77 per tonne, up 16 ringgit, or 0.35%, from the previous trading day. For the week, the benchmark contract rose 3.28%, reversing two consecutive weeks of declines. Although weakness in related commodities on the Dalian Commodity Exchange somewhat limited the gains, the overall upward trend has been established.
Recent geopolitical fluctuations have been the core driver of rising edible oil prices. On April 24th, Beijing time, international crude oil prices rose throughout the day and the week, influenced by escalating military tensions in the Middle East. As the mother of all commodities, the high price of crude oil directly enhances the attractiveness of palm oil as a fuel alternative.
A senior trader in Kuala Lumpur pointed out that since the escalation of external military operations, Malaysian palm oil futures contracts have become significantly more influenced by crude oil prices. The trader believes that the uncertainty stemming from geopolitical conflict will continue to provide a floor for edible oil prices until the situation substantially eases. The Malaysian Palm Oil Council (MPOC), a well-known institution, also emphasized in its view released on Friday that improved biodiesel economics and high crude oil prices are important cornerstones supporting the strength of palm oil prices.
From a professional trading perspective, the evolution of fundamentals is providing a medium- to long-term logic for the market. MPOC further analyzes that, in addition to the boost from energy prices, the potential development of El Niño could disrupt palm oil production. The anticipated reduction in supply due to climate factors, combined with the current strong biodiesel consumption, is expected to help crude palm oil prices remain above the key level of 4,500 ringgit per tonne in the short term.
Furthermore, exchange rate fluctuations have injected additional momentum into the export market. The Malaysian ringgit fell for the third consecutive day against the US dollar on Friday, and the weakening currency made ringgit-denominated palm oil more price-competitive for overseas buyers holding foreign currency. This exchange rate premium effect has, to some extent, offset some of the pressure on physical demand and strengthened the competitive position of Malaysian palm oil in the international edible oil market.
Despite the strong weekly performance of Malaysian palm oil futures, the movements of competing external commodities showed complexity. On Friday Beijing time, edible oil futures on the Dalian Commodity Exchange in China were relatively weak, with the most active soybean oil contract falling 1.04% and palm oil contracts also declining 0.37%. In contrast, soybean oil prices on the Chicago Board of Trade (CBOT) rose 0.53%.
Because palm oil is a strong substitute for soybean oil and other commodities in the global vegetable oil trade, the pullback in the Dalian Commodity Exchange (DCE) market exerted significant psychological pressure on Malaysian palm oil during the afternoon trading session, limiting the contract's potential for further gains. Technical analysis from well-known institutions indicates that, based on chart patterns, palm oil's failure to effectively break through the resistance level of 4,639 ringgit suggests that prices may fall back to a narrow range of 4,517-4,531 ringgit for consolidation in the short term.
In summary, the current trading focus in the palm oil market is shifting from a single demand-driven logic to a dual-driven model of "energy premium + supply concerns." On the one hand, the high volatility of the energy market provides a natural valuation premium for palm oil; on the other hand, the weakness of the Malaysian ringgit and potential climate risks have exacerbated expectations of tight supply.
In the coming week, professional traders need to closely monitor the impact of developments in the Middle East on crude oil prices, and whether the Dalian Commodity Exchange can stabilize. Although there is a need for technical consolidation, the overall palm oil market remains bullish with a volatile trend, supported by cost factors and a favorable macroeconomic environment. This weekly rally, driven by multiple complex factors, indicates that the market is reassessing its pricing weight in the global edible oil supply landscape after digesting previous negative sentiment.
Palm oil is one of the main raw materials for biodiesel. When crude oil prices rise, the cost of fossil diesel increases, making biodiesel more competitive in the energy market. This linkage effect significantly increases expected industrial demand for palm oil, thereby raising the valuation level of its futures market.
The Malaysian ringgit has fallen against the US dollar for three consecutive days. Since Malaysian palm oil is priced in ringgit, a weaker currency means international buyers holding US dollars or other foreign currencies can purchase the same quantity of the product at a relatively lower price. This exchange rate advantage typically stimulates export orders, thus supporting prices.
Palm oil is highly substitutable with other edible oils such as soybean oil in the international market. When soybean oil and palm oil prices fall on the Dalian Commodity Exchange, it reflects a cautious sentiment in some major consumer markets, or improved cost-effectiveness of competing products. To maintain competitiveness, Malaysian palm oil prices are often suppressed by the weakening of related commodities during periods of price increases.
This is a key support level analysis by a well-known institution based on current biodiesel economics, crude oil premiums, and climate-related supply expectations. The forecast indicates that, as long as these supporting factors do not fundamentally reverse, the market generally considers 4,500 ringgit to be a psychological and logical benchmark that is unlikely to be breached in the short term.
According to professional technical analysis, the main resistance level for palm oil is currently at 4,639 ringgit. As the market has failed to break through this resistance level effectively recently, profit-taking may occur in the short term, causing prices to fluctuate narrowly within the 4,517-4,531 ringgit range to digest the previous accumulated gains.
At the close of trading, the benchmark July palm oil contract on the Bursa Malaysia Derivatives Exchange (BMD) settled at $1,159.77 per tonne, up 16 ringgit, or 0.35%, from the previous trading day. For the week, the benchmark contract rose 3.28%, reversing two consecutive weeks of declines. Although weakness in related commodities on the Dalian Commodity Exchange somewhat limited the gains, the overall upward trend has been established.
Geopolitical risks drive up energy premiums: Biodiesel becomes more economical
Recent geopolitical fluctuations have been the core driver of rising edible oil prices. On April 24th, Beijing time, international crude oil prices rose throughout the day and the week, influenced by escalating military tensions in the Middle East. As the mother of all commodities, the high price of crude oil directly enhances the attractiveness of palm oil as a fuel alternative.
A senior trader in Kuala Lumpur pointed out that since the escalation of external military operations, Malaysian palm oil futures contracts have become significantly more influenced by crude oil prices. The trader believes that the uncertainty stemming from geopolitical conflict will continue to provide a floor for edible oil prices until the situation substantially eases. The Malaysian Palm Oil Council (MPOC), a well-known institution, also emphasized in its view released on Friday that improved biodiesel economics and high crude oil prices are important cornerstones supporting the strength of palm oil prices.
Policy Logic and Climate Factors: MPOC Predicts Support Above 4,500 Ringgit
From a professional trading perspective, the evolution of fundamentals is providing a medium- to long-term logic for the market. MPOC further analyzes that, in addition to the boost from energy prices, the potential development of El Niño could disrupt palm oil production. The anticipated reduction in supply due to climate factors, combined with the current strong biodiesel consumption, is expected to help crude palm oil prices remain above the key level of 4,500 ringgit per tonne in the short term.
Furthermore, exchange rate fluctuations have injected additional momentum into the export market. The Malaysian ringgit fell for the third consecutive day against the US dollar on Friday, and the weakening currency made ringgit-denominated palm oil more price-competitive for overseas buyers holding foreign currency. This exchange rate premium effect has, to some extent, offset some of the pressure on physical demand and strengthened the competitive position of Malaysian palm oil in the international edible oil market.
Domestic and international markets diverge: Dalian market faces a tug-of-war between price resistance and technical pressure.
Despite the strong weekly performance of Malaysian palm oil futures, the movements of competing external commodities showed complexity. On Friday Beijing time, edible oil futures on the Dalian Commodity Exchange in China were relatively weak, with the most active soybean oil contract falling 1.04% and palm oil contracts also declining 0.37%. In contrast, soybean oil prices on the Chicago Board of Trade (CBOT) rose 0.53%.
Because palm oil is a strong substitute for soybean oil and other commodities in the global vegetable oil trade, the pullback in the Dalian Commodity Exchange (DCE) market exerted significant psychological pressure on Malaysian palm oil during the afternoon trading session, limiting the contract's potential for further gains. Technical analysis from well-known institutions indicates that, based on chart patterns, palm oil's failure to effectively break through the resistance level of 4,639 ringgit suggests that prices may fall back to a narrow range of 4,517-4,531 ringgit for consolidation in the short term.
Market Outlook: Trading Focus Shifts to Supply-Side Uncertainty
In summary, the current trading focus in the palm oil market is shifting from a single demand-driven logic to a dual-driven model of "energy premium + supply concerns." On the one hand, the high volatility of the energy market provides a natural valuation premium for palm oil; on the other hand, the weakness of the Malaysian ringgit and potential climate risks have exacerbated expectations of tight supply.
In the coming week, professional traders need to closely monitor the impact of developments in the Middle East on crude oil prices, and whether the Dalian Commodity Exchange can stabilize. Although there is a need for technical consolidation, the overall palm oil market remains bullish with a volatile trend, supported by cost factors and a favorable macroeconomic environment. This weekly rally, driven by multiple complex factors, indicates that the market is reassessing its pricing weight in the global edible oil supply landscape after digesting previous negative sentiment.
Palm oil market FAQ
Why does a rise in international crude oil prices directly boost palm oil futures?
Palm oil is one of the main raw materials for biodiesel. When crude oil prices rise, the cost of fossil diesel increases, making biodiesel more competitive in the energy market. This linkage effect significantly increases expected industrial demand for palm oil, thereby raising the valuation level of its futures market.
What impact will this week's ringgit exchange rate fluctuations have on palm oil buyers?
The Malaysian ringgit has fallen against the US dollar for three consecutive days. Since Malaysian palm oil is priced in ringgit, a weaker currency means international buyers holding US dollars or other foreign currencies can purchase the same quantity of the product at a relatively lower price. This exchange rate advantage typically stimulates export orders, thus supporting prices.
Why does the trend of edible oils on the Dalian Commodity Exchange limit the rise in Malaysian palm oil prices?
Palm oil is highly substitutable with other edible oils such as soybean oil in the international market. When soybean oil and palm oil prices fall on the Dalian Commodity Exchange, it reflects a cautious sentiment in some major consumer markets, or improved cost-effectiveness of competing products. To maintain competitiveness, Malaysian palm oil prices are often suppressed by the weakening of related commodities during periods of price increases.
What is the significance of the 4,500 ringgit threshold mentioned by MPOC?
This is a key support level analysis by a well-known institution based on current biodiesel economics, crude oil premiums, and climate-related supply expectations. The forecast indicates that, as long as these supporting factors do not fundamentally reverse, the market generally considers 4,500 ringgit to be a psychological and logical benchmark that is unlikely to be breached in the short term.
What are the main technical obstacles currently facing palm oil?
According to professional technical analysis, the main resistance level for palm oil is currently at 4,639 ringgit. As the market has failed to break through this resistance level effectively recently, profit-taking may occur in the short term, causing prices to fluctuate narrowly within the 4,517-4,531 ringgit range to digest the previous accumulated gains.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
