Palm Oil Under Pressure Amid Weaker Crude, Demand Concerns

Malaysian palm oil futures slid around 3% to below MYR 4,630 per tonne, continuing their recent decline and marking the lowest level in almost two weeks. The slump followed a sharp fall in crude oil prices, which dampened risk appetite after U.S. President Donald Trump announced a two-week ceasefire in the Iran conflict, reducing palm’s appeal as a biofuel feedstock. Weaker edible oils on the Dalian and Chicago markets also pressured sentiment. Further, caution also grew ahead of key data from the Malaysian Palm Oil Board later this week. Demand worries added pressure, with imports in top buyer India down 19% in March to a three-month low as high prices curbed buying. Still, losses were capped by supply-side support, as Reuters forecast Malaysia’s steepest inventory draw in three years during March. Meantime, Indonesia, the world’s largest producer, posted strong February exports ahead of its B50 rollout in July, while Thailand reportedly tightened crude palm oil export controls.

Malaysian palm oil futures hovered near MYR 4,850 per tonne on Tuesday, rebounding from prior weakness as a weaker ringgit and firmer edible oil prices in Dalian and Chicago lent support. Crude oil’s rally, fueled by U.S. President Trump’s escalated rhetoric against Iran, further lifted sentiment for biofuel-linked commodities. On the supply side, Indonesia, the top producer, posted double-digit export growth in February ahead of its July B50 biodiesel mandate. Meanwhile, Thailand announced tighter crude palm oil export controls and regulated bottled oil prices from April 7. Cargo surveyors noted Malaysian shipments surged 44%–57% mom in March. Separately, Reuters forecast the steepest inventory draw in three years, cutting stockpiles to the lowest since July. Gains, however, were capped by caution ahead of official monthly data and China’s inflation release. Demand concerns also lingered after March imports fell 19% in top buyer India to a three-month low as high prices curbed buying.

Malaysian palm oil futures were little changed, hovering around MYR 4,840 per tonne after two sessions of gains. The closure of China’s Dalian exchange for a holiday offset weakness in Chicago soyoil prices. Sentiment stayed cautious amid escalating geopolitical tensions, with U.S. President Trump’s repeated threats against Iran and fears of Gulf retaliation adding volatility across commodities. On the supply side, a Reuters poll ahead of official monthly data suggested Malaysia’s inventories likely saw their steepest draw in three years in March, falling to the lowest since July. Meantime, cargo surveyors estimated shipments surged 44%–57% mom. Separately, top supplier Indonesia reported double-digit palm oil export growth in February as the sector prepares for a higher B50 biodiesel mandate in July. Regarding demand, March imports by India, the world's largest consumer, dropped 19% to a three-month low, with refiners delaying purchases amid elevated prices.