Palm Oil Firms as Week Begins

Malaysian palm oil futures plunged by nearly 2% to below MYR 4,500 per tonne, reversing prior gains amid a firmer ringgit and weaker edible oils on the Dalian and Chicago markets. A sharp drop in crude oil prices also weighed on sentiment, along with caution ahead of the Malaysian Palm Oil Board’s monthly report due later this week, with expectations pointing to another inventory build in May, according to Reuters. Meanwhile, cargo surveyors noted shipments fell 8.8%–15.5% in May from April. Demand from India, the world’s largest buyer, recovered modestly from April’s four-month low but stayed below historical norms. Still, losses were cushioned by upbeat Chinese trade data, with exports hitting a record and imports accelerating in May, signaling resilient demand in a key market. Additional support came from top grower Indonesia, where new technical rules tightened oversight of strategic commodity exports, including palm oil, potentially shifting some demand toward Malaysian supplies.

Malaysian palm oil futures traded above MYR 4,550 per tonne, rebounding from recent losses as a weaker ringgit improved export competitiveness and firmer Chicago soyoil lifted sentiment across the vegetable oil complex. A jump in crude oil prices, driven by fading hopes for a near-term resolution to Middle East tensions, added support through biofuel demand. In top producer Indonesia, authorities issued a technical regulation tightening oversight of key commodity exports, including palm oil, a move that could redirect some demand toward Malaysia. However, gains were capped by weaker rival oils on China’s Dalian exchange and bets of ample supply. Reuters forecast Malaysia’s inventories likely rose again in May, as sluggish exports outweighed lower output. Cargo surveyors estimated shipments fell 8.8%–15.5% from April, underscoring soft demand. Purchases by top buyer India recovered modestly from April’s four-month low but remained below typical levels, limiting the upside.

Malaysian palm oil futures slipped for a second session, hovering below MYR 4,600 per tonne as weaker rival oils on China’s Dalian Exchange weighed on sentiment. Expectations of rising inventories added pressure, with Reuters projecting May stockpiles climbed for a second month. Cargo surveyors estimated exports fell 8.8%–15.5% from April, underscoring subdued demand. Purchases by India, the world's largest palm oil importer, recovered slightly from April's four-month low but remained below normal levels. Still, futures were on track for a third weekly gain, up 0.7% so far, supported by a weaker ringgit that boosts export competitiveness. Crude oil also headed for solid weekly gains as Washington–Tehran talks stalled, enhancing palm oil’s appeal as biodiesel feedstock. Longer-term support stems from dry weather across Asia and forecasts of a severe El Niño, raising concerns over crop output and edible oil supplies.