Kuala Lumpur, June 21, 2025 —
Malaysian palm oil futures edged lower on Friday as weak demand in key consuming countries, including Pakistan and India, weighed on prices. However, despite the pullback, the benchmark contract remained on track for a sixth consecutive weekly gain, supported by strength in rival oils and earlier bullish sentiment in energy markets.
At the midday break, the benchmark September palm oil contract on the Bursa Malaysia Derivatives Exchange slipped 10 ringgit, or 0.24%, to 4,094 ringgit ($962.61) per metric ton.
So far this week, the contract has gained 5.5%, extending its winning streak despite signs of fading momentum and softer fundamentals.
Market Overbought? Traders See Need for Fresh Bullish Catalyst
“Trading volumes have been thin and the market appears to have priced in most of the known internal and external variables,” said Paramalingam Supramaniam, director at Pelindung Bestari, a brokerage firm based in Selangor.
“Sustaining the current rally will need fresh bullish catalysts. The market has run ahead of demand, and July will be crucial for assessing real buying interest,” he added.
So far, the rally has been driven largely by external factors — such as gains in rival soyoil markets and supportive biodiesel mandates — but has not been backed by strong physical demand.
Global Edible Oils: Mixed Signals from Soyoil and Crude Oil
Palm oil prices typically move in tandem with other major edible oils. On Friday:
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Dalian’s most-active soyoil contract rose 0.52%
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Dalian palm oil fell 0.05%
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Chicago Board of Trade (CBOT) soyoil gained 0.38%
This divergence underscores market indecision, with profit-taking in palm oil following the recent rally, even as soyoil remains firm due to sustained energy market optimism and biofuel policy expectations.
Crude Oil Retreats, Biodiesel Economics Take a Hit
Adding pressure, Brent crude oil futures lost nearly $2 on Friday after the White House delayed a decision on U.S. involvement in the escalating Israel-Iran conflict. The move reduced fears of supply disruption, weakening crude — which directly affects palm oil’s competitiveness in biodiesel blending.
Weaker crude prices typically reduce demand for palm-based biodiesel, especially in exporting countries like Indonesia and Malaysia, where mandates are linked to fuel economics.
Currency Dynamics: Ringgit Gains Slightly
The Malaysian ringgit, in which palm oil is traded, strengthened 0.09% against the U.S. dollar on Friday. This made ringgit-denominated palm oil more expensive for foreign buyers, contributing to softer export demand.
Still, export optimism remains intact, with cargo surveyors expected to release Malaysian palm oil shipment data for June 1-20 later today. Preliminary estimates will be watched closely for signs of demand rebound, especially from Pakistan, China, and the Middle East.
Pakistan: A Key Consumer Market
Pakistan remains one of the largest importers of Malaysian palm oil, especially for refining and industrial usage. According to industry sources, palm oil remains the cornerstone of Pakistan’s edible oils and fats sector, accounting for over 70% of total vegetable oil imports.
However, sluggish refinery margins and slower downstream demand have tempered buying interest in recent weeks. A pickup in monsoon-season demand and government tenders could revive imports heading into July.
Conclusion: Weekly Uptrend Intact but Caution Ahead
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Palm oil futures dipped 0.24% on Friday
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Still up 5.5% for the week, marking six straight weeks of gains
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Demand outlook remains key, with July shaping up to be the market’s next major test
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Crude oil pullback and ringgit strength may cap further upside in near term
The short-term direction of palm oil futures will depend on upcoming export figures, crude oil volatility, and any policy shifts in key markets such as India, Pakistan, and Indonesia.