Palm oil prices rose for the fourth consecutive session to 4,657 ringgit, as Indonesia anticipates imposing additional tariffs.
Palm oil futures contracts in Malaysia rose more than 1.8%, boosted by gains from the Dalian exchange and strong export demand, while Indonesia considered raising taxes to protect its budget.
At the close of trading on the morning of March 16th, the vegetable oil market saw strong growth in palm oil. On the Bursa Malaysia exchange, the FCPOc3 palm oil contract for June 2026 delivery rose 85 ringgit, or 1.86%, closing at 4,657 ringgit (approximately US$1,184.99) per ton. This marked the fourth consecutive day of gains for this commodity.
The differentiation among international exchanges
Palm oil prices were primarily supported by positive developments on the Dalian Commodity Exchange. There, the DBYcv1 soybean oil contract rose 0.34%, while the DCPcv1 palm oil contract recorded a significant increase of 2.52%. Conversely, on the Chicago exchange, the BOcv1 soybean oil price fell 0.95%, putting some downward pressure on the overall global market rally.
The Malaysian ringgit also recorded a 0.15% increase against the US dollar at lunchtime. A stronger domestic currency typically makes palm oil more expensive for importers using other currencies, however, market demand remains strong.
Export demand has surged and fluctuated among major consuming countries.
According to data from the commodity inspection company Intertek Testing Services, Malaysia's palm oil exports in the first half of March 2026 increased by 43.5% compared to the same period last year. This increase occurred against the backdrop of India – the leading consumer market – increasing its palm oil imports by 11% in February 2026 due to more attractive discounts compared to other vegetable oils.
New tax policy from Indonesia
Indonesia, the world's largest palm oil producer, is considering new financial measures. The country's senior Economy Minister said the government may impose additional taxes on certain commodities, including palm oil, to mitigate the negative impact on the budget amid volatile global oil prices.
In terms of production, the GAPKI Palm Oil Association forecasts that Indonesia's crude palm oil production in 2025 could reach 51.66 million tons, a 7.3% increase year-on-year. Meanwhile, the APROBI Association's plan to test blending 50% palm oil biodiesel (B50) is expected to take place in June or July.
Technical analysis and market forecasting
In the energy market, crude oil prices recovered following security concerns at oil facilities in the Middle East, despite earlier calls from US President Donald Trump for the formation of a coalition to protect the Strait of Hormuz.
Commenting on technical trends, Reuters analyst Wang Tao said palm oil prices are likely to test the support level of 4,494 ringgit/tonne. Previously, the commodity had twice attempted to break through the resistance level of 4,612 ringgit/tonne but failed. Currently, Malaysia has raised its benchmark price for crude palm oil for April 2026 and increased the export tax to 9.5%.
