Palm Oil Extends Strength

Malaysian palm oil futures hovered near MYR 4,600 per tonne, rebounding from recent declines as stronger vegetable oil prices on China’s Dalian Exchange lifted sentiment. Firmer export demand also lent support, with cargo surveyors estimating shipments rose 10.6%–11.1% in the first 25 days of June. Meanwhile, top supplier Indonesia moved to roll out its B50 biodiesel mandate from July 1, with a three-month transition period for retailers to clear existing stocks, reinforcing views of higher domestic consumption. Supply concerns also persisted as weather-related risks continued to cloud production. In India, palm oil imports are expected to top 600,000 tonnes in June, up from 549,356 tonnes in May, underscoring robust demand from the world’s largest buyer. However, the contract remained on track for a weekly loss of about 1%, reversing the prior week’s strong gains as a firmer ringgit and a sharp drop in crude oil prices, amid easing Middle East supply concerns, capped upside momentum.

Malaysian palm oil futures slid almost 2% to below MYR 4,600 per tonne, marking a one-week low and registering losses of over 2% so far this week. Sentiment weakened amid a stronger ringgit and weaker edible oil prices on Dalian and Chicago exchanges. Meanwhile, crude oil prices eased toward pre-conflict levels, eroding palm oil’s competitiveness and biofuel appeal. Pressure also followed Malaysia’s cut to its July crude palm oil reference price, though the export duty stayed at 10%. Still, losses were tempered by firm export demand, with cargo surveyors estimating June 1–20 shipments rose 19.1%–25% from the same period in May. Meantime, supply concerns lingered as El Niño continued to curb output. In top producer Indonesia, the B50 biodiesel mandate will kick off on July 1, potentially expanding domestic use. Meanwhile, India’s June palm oil imports are projected above 600,000 tonnes, compared with 549,356 tonnes in May, underscoring resilient demand from the world's largest buyer.

Malaysian palm oil futures hovered above MYR 4,650 per tonne, recovering from earlier weakness amid a softer ringgit and firmer soyoil prices on the Dalian and Chicago markets. Strong exports also supported prices, with cargo surveyors noting June 1–20 shipments rose between 19.1% and 25% from the same period in May. Supply concerns persisted as the effects of El Niño continued to point to tighter output. In Indonesia, the world's largest supplier, the B50 biodiesel mandate is set to take effect on July 1, boosting expectations for stronger domestic consumption. Meanwhile, India's palm oil imports are projected to top 600,000 tonnes in June, up from 549,356 tonnes in May, highlighting resilient demand from the world's biggest buyer. However, gains were capped by weaker crude oil prices as easing concerns over disruptions in the Strait of Hormuz weighed on the energy market. Separately, Malaysia trimmed its July crude palm oil reference price while keeping its export duty at 10%.