Crude Palm Oil (CPO) futures trading on the Bursa Malaysia Derivatives concluded 2025 and began 2026 under downward pressure, primarily influenced by softening near-term demand indicators and routine profit-taking by market participants. The benchmark March 2026 CPO contract closed the final trading day of 2025, Wednesday, December 31, 2025, at RM3,998 per tonne. This set the stage for further weakness, as Malaysian palm oil futures slipped approximately 1% by the first trading day of 2026, January 2, 2026, hovering near the MYR 4,000 per tonne level, with one report noting a 1.19% decline to MYR 4,002/T.
This immediate bearish sentiment contrasts with underlying expectations for a price resurgence tied to significant seasonal consumption spikes. The late-2025 weakness followed a December rally initially supported by robust import volumes from India, which increased its purchases by 66% in the first 25 days of the month compared to the preceding month. However, the subsequent decline is attributed to a tangible slowdown in export activity; Malaysian exports fell by 5% in December 2025, totaling 1.2 million tons according to AmSpec data, while cargo surveyors noted a 5.2%–5.8% drop for December 1–25 versus November.
This contraction in exports, coupled with a strengthening Malaysian ringgit—which approached a four-and-a-half-year high—made Malaysian palm oil comparatively more expensive for international buyers, dampening the immediate demand outlook. Macroeconomic factors are also exerting downward pressure on CPO valuations. Declining crude oil prices, a key input for biodiesel, have undercut palm oil’s value proposition in the energy sector. On January 2, 2026, WTI crude settled near $57.42 per barrel after recording its steepest annual loss since 2020, while Brent crude traded around $61 a barrel, often correlating with softer sentiment across vegetable oils.
