Palm Oil Slips on Stronger Ringgit and Weak Export Demand

Malaysian palm oil futures rose for a second straight session, hovering around MYR 4,550 per tonne, supported by a weaker ringgit and stronger edible oil prices on the Dalian and Chicago exchanges. Sentiment was further lifted by rising exports, with cargo surveyors noting that Malaysian palm oil shipments during June 1–10 rose between 3.5% and 4.9% from the prior month. Additional support came from the broader energy market, where oil prices surged amid heightened concerns over Middle East supply disruptions, boosting the outlook for biodiesel demand. However, upside was capped as industry data showed Malaysia’s stocks rose for a second month in May. Meanwhile, demand from top buyer India rose slightly in May from April’s four-month low, remaining below typical levels. In Indonesia, the world’s largest producer, the government launched new technical rules for key commodity exports, including palm oil, unsettling exporters and injecting fresh uncertainty into near-term trade flows.

Malaysian palm oil futures hovered near MYR 4,530 per tonne, steady after the prior session’s sharp losses. Support from a softer ringgit and firmer Chicago soyoil was offset by weakness in rival edible oils on China’s Dalian exchange. Traders stayed cautious ahead of official industry data, with a Reuters survey pointing to another inventory build in May as sluggish exports outweighed lower output. Demand from top buyer India recovered modestly from April’s four-month low but remained below historical norms. Meanwhile, Indonesia, the world's largest palm oil supplier, introduced new technical rules tightening oversight of strategic commodity exports, including palm oil, raising concerns among exporters and potentially diverting some demand toward Malaysia. Still, export prospects stayed weak, with cargo surveyors estimating May shipments fell 8.8%–15.5% from April, underscoring persistent softness in external demand.

Malaysian palm oil futures plunged by nearly 2% to below MYR 4,500 per tonne, reversing prior gains amid a firmer ringgit and weaker edible oils on the Dalian and Chicago markets. A sharp drop in crude oil prices also weighed on sentiment, along with caution ahead of the Malaysian Palm Oil Board’s monthly report due later this week, with expectations pointing to another inventory build in May, according to Reuters. Meanwhile, cargo surveyors noted shipments fell 8.8%–15.5% in May from April. Demand from India, the world’s largest buyer, recovered modestly from April’s four-month low but stayed below historical norms. Still, losses were cushioned by upbeat Chinese trade data, with exports hitting a record and imports accelerating in May, signaling resilient demand in a key market. Additional support came from top grower Indonesia, where new technical rules tightened oversight of strategic commodity exports, including palm oil, potentially shifting some demand toward Malaysian supplies.