Palm Oil Recovers on Improved Sentiment, Lower Stocks

Malaysian palm oil futures jumped around 1% to near MYR 4,600 per tonne, rebounding from recent weakness as a softer ringgit and firmer Chicago soyoil lent support. A rally in global crude oil prices following the collapse of U.S.–Iran talks also lifted sentiment, boosting risk appetite. Fundamentals added strength, with monthly data from the Malaysian Palm Oil Board showing March inventories fell for a third month to a seven-month low. In top buyer India, expectations of restocking ahead of seasonal demand grew after March imports slid 19% to a three-month low. However, gains were tempered by weaker export estimates, as cargo surveyors noted palm oil shipments slipped between 30.7% to 38.9% in the first ten days of April from the same period in March. Policy developments in Indonesia, the largest supplier, drew attention after President Prabowo ordered legal action against firms resisting a forestry crackdown, with 5.88 million hectares of oil palm plantations already seized.

Malaysian palm oil futures eased slightly, hovering below MYR 4,650 per tonne after recent gains, pressured by a firmer ringgit. The benchmark contract is heading for a weekly drop of over 4%, breaking a five-week winning streak, after Malaysian Palm Oil Board monthly data showed March production rose 7.21% month-on-month to 1.38 million tonnes. Still, weakness was limited as palm oil inventories fell 16.14% last month to 2.27 million tonnes while exports surged 40.69% to 1.55 million tonnes. Broader edible oil markets also strengthened, with strength in Dalian and Chicago contracts, reflecting hopes of easing geopolitical tensions in Iran. In India, the top buyer, expectations of restocking ahead of stronger seasonal demand grew after imports dropped 19% to a three-month low in March. Meanwhile, Indonesia, the world's largest grower, issued a decree outlining its biofuel mandate timeline. Traders now await fresh shipment estimates from cargo surveyors later today for more direction.

Malaysian palm oil futures hovered above MYR 4,600 per tonne, recovering from recent losses that had pushed prices to a near two-week low. The upturn was supported by bargain hunting, a weaker ringgit, and firmer soyoil prices on the Chicago market. Gains were further boosted by a surge in crude oil prices, driven by doubts over the durability of the two-week ceasefire between the U.S. and Iran, which lifted broader commodity sentiment. Meanwhile, Reuters projected the steepest inventory drop in three years for March. In Indonesia, the world’s largest producer, a ministerial decree was issued outlining the timeline for the country’s biofuel mandate. However, the upside was capped by weakness in edible oils on the Dalian exchange and persistent demand concerns in top buyer India, where palm oil imports fell 19% in March. Caution also grew ahead of key data releases, including the Malaysian Palm Oil Board’s monthly report and inflation figures from major consumer China, both due Friday.