Rising shipments and India demand support prices amid supply chain disruptions

Malaysian palm oil futures rebounded to around MYR 4,580 per tonne, recovering from recent declines as a softer ringgit and firmer soyoil prices on the Dalian market provided near-term support. The uptick reflects improving export dynamics and currency-driven competitiveness in global markets.

Export momentum has strengthened significantly, with shipments during March 1–15 rising between 43.5 per cent and 56.9 per cent month-on-month, driven largely by festive demand across key importing regions. Supporting demand trends, India—the world’s largest buyer—recorded an 11 per cent increase in palm oil imports in February, reaching a six-month high due to its price advantage over competing edible oils.

On the supply side, potential policy changes in Indonesia, the world’s largest palm oil producer, are adding a layer of uncertainty. The government is evaluating new commodity taxes, including on palm oil, as part of broader fiscal measures to contain its budget deficit, a move that could tighten global supply conditions if implemented.

However, despite the recent recovery, palm oil futures remain on track for a marginal weekly decline of approximately 0.4 per cent, reflecting underlying market caution. Rising cost pressures, driven by supply chain disruptions and feedstock shortages linked to geopolitical tensions in the Middle East, continue to weigh on sentiment.

Overall, the market remains balanced between strong demand signals and emerging supply-side and cost challenges, with near-term price direction likely to be shaped by policy developments, global trade flows, and macroeconomic volatility.