Palm oil futures volatility to increase corporate hedging

Plunging crude prices starting to impact correlated palm oil sector

Palm oil plantations

Malaysian crude palm oil (CPO) futures recorded their biggest drop for more than two years on December 4 before rebounding by the end of the week, and analysts predict such volatility will become a hallmark of the market, driving greater hedging activity.

The benchmark contract initially fell 4.1% on the back of news that the crude oil producers' cartel Opec would not cut supply in order to boost oil prices – a significant one-day shift in the context of commodity trading. The price of palm oil