Malaysia palm oil prices rally in the first half of February
1 RM (Malaysian Ringgit) = 0.23 USD*
1 USD = 0.79 GBP
*Note, exchange rates are for February 17, 2025
After falling during the second half of January, the Malaysia Crude Palm Oil settlement price recovered in the first part of February, before slipping a little.
The price began the month at RM4,415/tonne (US$1015), a jump of 3.0% on the last trades in January. By the 12th of February, the price had reached RM4,618/tonne (US$1,062), the highest it had been since the 27th of December 2024. Prices then eased a little.
The latest price of RM4,528/tonne (US$1,041) was 8.3% more than the month before, 19.0% more than the year before, but 36.3% lower than the all-time highest price set in April 2022.
Malaysia CPO Settlement Price RM
Analysis: Malaysian flooding does limited damage to palm oil production
The Northeast Monsoon period, which began in November 2024, has caused flooding but had a limited impact on palm oil production and prospects.
There have been localised disruptions and harvest delays because of waterlogging, but the impact is manageable, Ahmad Parveez Ghulman Kadir, the director general of the Malaysian Palm Oil Board told Reuters.
There was significant flooding in November which displaced 90,000 people, with another wave in January which hit Sarawak and Sabah on the Island of Borneo. The two areas account for 55% of Malaysia’s palm oil plantations and 44% of its palm oil output last year. The board is working with growers to minimise the impact of flooding.
Ahmad Parveez reported steady demand from China and Europe for Malaysian palm oil but added that the oil faces strong competition from soybeans in India, with soy oil and sunflower oil posing a threat to palm oil in coming months.
The Muslim festival of Ramadan has helped boost the demand for palm oil in recent days. It begins on the 28th of February and continues until the 30th of March.
Tariff threats impact all oil markets
The threat of a global tariff war has influenced the market for all types of oil over the last few weeks. Crude oil prices ended 2024 at US$70 a barrel but jumped to US$78 in the run-up to new US President Donald Trump’s inauguration on the 20th of January. His threat to impose tariffs on a number of countries resulted in a decline in crude prices, but they were given a small boost when he delayed action.
Current crude oil prices are at US$70 a barrel, which compares to US$65 in September 2024. Other factors influencing the market include a weaker US dollar that makes imports into the world’s economy a little more expensive, which could impact Malaysian palm oil and other commodities.
There is also the prospect of some easing of trade restrictions on Russian oil and gas if there are peace talks with the US.
Disclaimer: The information in this document has been obtained from or based upon sources believed to be reliable and accurate at the time of writing. The document should be for information purposes only and is not guaranteed to be accurate or complete.