Palm Oil Under Pressure Amid Weaker Crude, Demand Concerns

Malaysian palm oil futures rose more than 1% to near MYR 4,600 per tonne, bouncing back from subdued trade as markets reopened after a long holiday. Support came from a weaker ringgit, firmer Chicago soyoil, and elevated crude oil prices amid stalled U.S.–Iran talks that reinforced biodiesel demand prospects. In top buyer India, palm oil purchases edged higher in May from April's four-month low but remained below typical levels. Meanwhile, Indonesia, the world's largest producer, exported 7.72 million tonnes of crude and refined palm oil during the first four months of 2026, up 20.4% from a year earlier, according to official data. However, gains were limited by weakness in edible oils traded on China's Dalian exchange. Concerns over soft export demand also persisted, with cargo surveyors reporting that Malaysian palm oil shipments during May 1–25 fell between 14.5% and 18.0% from April levels, partly reflecting the absence of festive buying demand.

Malaysian palm oil futures hovered around MYR 4,550 per tonne, extending recent gains amid firmer edible oil prices on the Dalian Exchange and concerns over softer Malaysian output. Sentiment remained supported by top supplier Indonesia’s plan to route key commodity exports, including palm oil, through a state-run trading firm starting in September, a move that could potentially benefit Malaysian shipments. However, contracts are on track for a second monthly drop, weighed by sluggish exports. Cargo surveyors noted exports during May 1–25 fell between 14.5% and 18.0% from April, partly due to the absence of festive buying. Demand outlook from India, the world’s largest palm oil importer, stayed uncertain after imports plunged 26% to a four-month low in April. Separately, crude oil prices are on track to post a steep monthly fall as reports of a tentative extension of the U.S.–Iran ceasefire eased fears of supply disruptions in the Middle East. Markets will resume trading on Wednesday.

Malaysian palm oil futures rose for a second straight session, hovering above MYR 4,500 per tonne as trading resumed after a holiday break. Support came from a weaker ringgit, concerns over softer Malaysian output, and firmer edible oils in Dalian and Chicago markets. Simultaneously, crude oil prices surged as Washington–Tehran tensions escalated, despite ongoing peace talks, adding upside support to palm oil through its biodiesel link. Meanwhile, top producer Indonesia plans to channel key commodity exports, including palm oil, through a state-run firm starting in September, a move that could benefit Malaysian palm oil shipments. However, gains were capped by an uncertain demand outlook from India, the world's largest importer, after the country’s palm oil imports plunged 26% in April to a four-month low. Weak export demand also weighed, with cargo surveyors noting that Malaysian palm oil exports during May 1–25 fell between 14.5% and 18.0% from the same period in April.