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Palm oil snaps four-session rally as profit-booking and weak cues weigh on prices
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Wednesday, 31 December, 2025, 12 : 00 PM [IST]
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Our Bureau, Mumbai
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Palm oil prices ended a four-session winning streak as traders resorted to profit-booking amid mixed demand signals and softer cues from rival vegetable oils. The pullback comes after a brief rally driven by supply concerns and expectations of seasonal tightening, market participants said.
According to trade sources, the recent uptrend had prompted speculative buying, pushing prices higher over consecutive sessions. However, the lack of fresh bullish triggers and cautious sentiment in global commodity markets led to a correction, with buyers turning selective. Weaker performance in soy oil and sunflower oil markets also added pressure, reducing palm oil’s comparative attractiveness.
Demand-side concerns played a role in the reversal. Key importing countries were seen holding back purchases as prices climbed, preferring to wait for better levels. Refiners and bulk buyers are currently balancing inventory positions, especially as consumption growth remains uneven across regions due to inflationary pressures and changing edible oil blends.
On the supply front, production in major palm oil–producing countries is expected to improve gradually as plantations move past seasonal lows. While labour availability and weather remain watch points, expectations of slightly higher output in the coming weeks have eased immediate supply fears, contributing to the price dip.
Currency movements and crude oil trends also influenced sentiment. A firmer dollar typically makes dollar-denominated commodities more expensive for overseas buyers, while volatility in energy markets has impacted biodiesel-linked demand for palm oil.
Despite the short-term correction, industry analysts believe the broader outlook remains cautiously optimistic. Palm oil fundamentals continue to be supported by steady food demand, limited expansion of plantation areas and policy support for biofuels in some markets. Any sharp decline in prices could attract renewed buying interest from cost-sensitive importers.
Market participants expect palm oil prices to trade in a narrow range in the near term, tracking developments in rival oils, export data and weather conditions in producing regions. For now, the snap in the rally reflects a pause rather than a reversal, as the market recalibrates after recent gains.
For the edible oil trade, palm oil movements remain closely watched, given its dominant share in global consumption and its influence on overall vegetable oil price trends.
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