Palm Oil Hits 7-week High

Malaysian palm oil futures jumped about 1.5% to above MYR 4,800 per tonne, rebounding from earlier losses. Strength in Chicago soyoil and firmer crude oil prices, which improved biodiesel margins, underpinned the rally. Energy markets were supported after U.S. President Donald Trump, in a national address, pledged continued pressure on Iran’s energy sector without a clear timeline for resolution. On the demand side, cargo surveyors estimated that March palm oil exports surged between 44% and 57% from February, providing near-term support. However, gains were capped by a stronger ringgit and softer demand from top buyer India, with imports expected to ease to around 680,000 tonnes in March from 847,689 tonnes a month earlier. In Indonesia, the world’s largest producer, an industry association noted that biodiesel feedstock demand may reach 15 million tonnes this year, up 2 million tonnes, driven by the B50 rollout scheduled for July.

Malaysian palm oil futures hovered above MYR 4,850 per tonne on the first trading day of a new month, extending gains for a fifth straight session and reaching their highest level since December 2024. Strength came from firmer edible oil prices in Dalian and Chicago markets, alongside stronger crude ahead of U.S. President Trump’s address on Iran. The upside was further reinforced after Indonesia, a top producer, said it will raise its mandatory biodiesel blending rate to 50%, B50, from 40% starting July 1. In China, another main consumer, factory activity expanded for a fourth consecutive month in March, though growth slowed, according to a private survey. However, gains were capped by a stronger ringgit and expectations of softer demand in top buyer India, with March imports estimated at 680,000 tonnes versus 847,689 tonnes in February. Meanwhile, EU palm oil imports for the 2025/26 season beginning July slipped 2% year-on-year to 2.14 million tonnes, European Commission data showed.

Malaysian palm oil futures slipped below MYR 4,800 per tonne on Tuesday, snapping a three-session gain as profit-taking set in, the ringgit firmed, and soyoil prices weakened on the Dalian and Chicago exchanges. Caution also emerged ahead of full-month March export data due later today, following a run of firm figures. Demand signals from top buyer India eased, with March imports projected at 680,000 tonnes versus 847,689 tonnes in February, adding pressure. Indian regulators also extended the suspension of derivatives trading in key agricultural commodities, including crude palm oil, through March 2027, potentially curbing activity. Still, futures remain on track for a robust monthly gain of about 17.6%, the largest since April 2022, boosted by a surge in crude oil prices amid prolonged Middle East tensions. In China, a key buyer, manufacturing activity picked up after the Spring Festival. Meantime, Indonesia, the main supplier, reaffirmed plans to roll out its B50 mandate this year.