Palm Oil Extends Strength

Malaysian palm oil futures extended losses, trading near MYR 4,600 per tonne and moving further away from a near four-week high, as weakness in rival edible oils on the Dalian and Chicago exchanges weighed on sentiment. Demand concerns also persisted after palm oil imports by top buyer India fell to a 14-month low in June, pointing to softer near-term buying interest. Meantime, export data for July 1–20 provided little direction, with AmSpec Agri Malaysia reporting shipments fell 0.9% from the same period in June, while Intertek Testing Services estimated a 4.1% increase. Still, losses were cushioned by a weaker ringgit and growing supply risks, with higher biodiesel mandates in Indonesia and Malaysia reducing export availability and providing underlying support to prices. Investors also looked to the upcoming Politburo meeting later this month in China, another major palm oil consumer, hoping for fresh stimulus after second-quarter growth undershot expectations.

Malaysian palm oil futures slipped below MYR 4,650 per tonne, pulling back from recent gains as traders locked in profits after prices hit a near four-week high. Weaker edible oil prices on the Dalian and Chicago exchanges also weighed on sentiment. Meanwhile, softer crude oil prices reduced support for biofuel feedstocks, following reports of renewed U.S.-Iran mediation efforts. Demand worries added to the slide after June palm oil imports in top consumer India dropped to a 14-month low, with narrowing price discounts curbing buying. Still, losses were capped by supply risks: Malaysia’s meteorological agency warned of record-high temperatures next year as El Niño intensifies, threatening yields. The U.S. Climate Prediction Center likewise noted El Niño strengthened last month and is expected to persist through early 2027. Export data for July 1–20 were mixed, with AmSpec Agri Malaysia reporting a 0.9% decline from June, while Intertek Testing Services estimated shipments rose 4.1%.

Malaysian palm oil futures traded above MYR 4,600 per tonne, recovering from the prior weakness as stronger edible oil prices on the Dalian and Chicago exchanges lifted sentiment. Higher crude oil prices also provided support after intensified attacks in the Middle East disrupted energy shipments through the Strait of Hormuz, boosting the appeal of biodiesel feedstocks. Export demand remained solid, with cargo surveyors estimating palm oil shipments during July 1-15 increased by between 4% and 12.4% from the same period in June. Supply concerns also persisted after the U.S. Climate Prediction Center said El Niño had strengthened over the past month and is expected to intensify through 2026 before lasting into early 2027, raising risks of lower palm oil production in the coming months. However, gains were capped by weaker demand from top buyer India, where palm oil imports fell to a 14-month low in June as the narrower price discount against competing edible oils discouraged purchases.