Palm Oil Edges Lower, Poised for First Weekly Gain in Three

Malaysian palm oil futures slipped about 1% to below MYR 4,600 per tonne, sustaining a muted trend as weaker edible oil prices on the Dalian and Chicago exchanges weighed on sentiment. Weak exports added pressure, with cargo surveyors estimating shipments during May 1–20 fell 13.9%–20.5% from the prior month. Demand worries deepened after April imports from top buyer India plunged 26% in April from March to a four-month low, reflecting softer institutional buying and a narrowing discount versus rival oils. Still, losses were cushioned by firmer crude oil, which bolstered biodiesel demand expectations and underscored global supply risks. Support also came from Indonesia’s plan to centralize commodity exports from the world's largest producer, including palm oil, raising concerns over supply disruptions. Jakarta will also lift its biodiesel mandate to B50 from B40 in July, while Malaysia is set to raise its blending requirement to B15 from B10 in June.

Malaysian palm oil futures jumped almost 2% to above MYR 4,650 per tonne, extending recent gains to their highest level in two weeks. Sentiment was boosted by stronger edible oil prices on the Dalian and Chicago markets, alongside a weaker ringgit. Prices also drew support from reports that Indonesia, the top supplier, plans tighter oversight of commodity exports, including palm oil and coal, to boost state revenue. Supply concerns added momentum after rising input costs prompted Malaysian growers to scale back replanting, delaying a process vital for long-term output. Elevated vegetable oil prices have further discouraged replanting. However, upside was capped by weak demand signals. AmSpec Agri Malaysia estimated exports during May 1–15 fell 16.5% from April. Meanwhile, April imports by India, the largest consumer, dropped 26% from March to a four-month low, pressured by softer institutional demand and a narrowing price discount against rival oils.

Malaysian palm oil futures eased, hovering below MYR 4,530 per tonne after two days of gains, pressured by weaker Chicago soyoil and softer crude oil. On the demand side, export prospects weakened after AmSpec Agri Malaysia noted that shipments during the May 1-15 period fell 16.5% from the same period in April. In India, the world’s largest palm oil importer, purchases dropped 26% in April from March to a four-month low, weighed by softer institutional demand and a narrower discount to rival oils. Separately, Malaysia cut its June crude palm oil reference price while keeping the export duty unchanged at 10%. Caution also persisted after the Malaysian Palm Oil Council projected palm oil prices to stay near MYR 4,400 per tonne in June despite support from global biofuel policies and weather-related supply risks. Still, losses were tempered by firmer Dalian edible oil prices and Malaysia’s plan to raise its biodiesel mandate to B15 from B10 starting June 1, aimed at curbing fuel imports.