Palm Oil Eases, Eyes Strongest Monthly Gain Since April 2022

Malaysian palm oil futures remained under strain, trading around MYR 4,500 per tonne and touching an over one-month low. Sentiment weakened amid losses in Dalian and Chicago edible oil markets and concerns over ample supplies, with stocks hitting a record high in September and expected to top 3 million tonnes by year-end amid peak seasonal production. Competitive pressure also mounted after Indonesia cut its November CPO reference price by 6.07% to USD978.90 per tonne and lowered its export levy, making Malaysian palm oil less competitive. Meanwhile, easing crude oil prices amid hopes of progress in US-Iran peace talks reduced palm oil's appeal as a biodiesel feedstock. Caution also prevailed ahead of MPOB's monthly report on November 10. However, a weaker ringgit and robust demand offered some support, with October shipments jumping 45.4%–73.5% from September. In India, the largest buyer, palm oil imports stood at a 14-month high in October, boosted by festive demand ahead of Diwali.

Malaysian palm oil futures extended their decline, remaining below MYR 4,700 per tonne amid weakness in Dalian-traded edible oils. Abundant inventories added pressure, with stocks hitting a record high in September and expected to exceed 3 million tonnes by year-end amid peak seasonal production. Meanwhile, Indonesia, the top producer, lowered its November crude palm oil reference price by 6.1% to USD 978.90 per tonne, cutting combined export duty and levy by around 20% to USD 246.36 per tonne. Caution also prevailed ahead of the Malaysian Palm Oil Board's monthly report due on November 10. Still, a weaker ringgit helped limit losses, while a slight recovery in crude oil prices improved palm oil's appeal as a biodiesel feedstock. On the demand front, exports remained firm, with cargo surveyors reporting a 45.4%–73.5% monthly surge in October shipments, partly driven by pre-Diwali buying from India, the world's largest palm oil importer.

Malaysian palm oil futures fell below MYR 4,700 per tonne, reversing the previous rally as weaker crude oil prices reduced palm oil’s appeal as a biodiesel feedstock. Record-high inventories added pressure, while mixed manufacturing data from China, a major palm oil importer, offered little clarity on the demand outlook. The official PMI showed contraction, contrasting with continued expansion in the private-sector survey. Still, a weaker ringgit and firm exports limited the decline. Cargo surveyors reported a 46.9%–67.7% surge in shipments during October 1–25 from the same period in September, partly driven by pre-Diwali buying from top consumer India. Meanwhile, Malaysia’s Finance Ministry is reportedly reviewing a proposal to suspend crude palm oil export taxes as inventories are expected to exceed 3 million tonnes by year-end amid peak seasonal production. Traders will look to Malaysia's Palm Oil Board’s monthly report due November 10 for further clues on the supply-demand balance.