Palm Oil Extends Gains

Malaysian palm oil futures increased for a second session, rising above MYR 4,500 per tonne, supported by a weaker ringgit and firmer edible oil prices on the Dalian and Chicago markets. Sentiment was also underpinned by expectations of a rebound in Indian demand after shipments to the world’s largest buyer fell 19% mom in March. In addition, Malaysia is moving in step with top producer Indonesia to expand its blending mandate, with the industry regulator projecting palm-based biodiesel consumption to increase by more than 300,000 tonnes annually. However, the upside was capped by softer crude oil prices, which tend to weigh on biofuel-linked demand. Export data also pointed to weakness, with cargo surveyors noting shipments of Malaysian palm oil products for April 1–20 fell between 25.6% and 25.8% from the prior month. In China, another major consumer, imports of key agricultural commodities, including soybeans, are also expected to decline this year, adding to demand-side caution.

Malaysian palm oil futures hovered around MYR 4,480 per tonne after briefly slipping below MYR 4,440 in the prior session, tracking firmer prices on the Dalian exchange and gains in soyoil on Chicago markets. Strength in global oil prices also lent support, after renewed tensions between the U.S. and Iran, lifting energy markets. On the demand side, purchases from India, the world’s largest palm oil importer, are expected to recover after a 19% drop in March shipments. Locally, Malaysia’s palm-based biodiesel consumption is projected to rise by over 300,000 tonnes annually, according to the industry regulator, as the country aligns with Indonesia in advancing blending mandates to reduce reliance on imported fuels. However, gains were capped after Statistics Malaysia reported a modest fall in March exports of palm oil and related products, reflecting weak demand after the festive season. Separately, cargo surveyors noted April 1–15 palm oil shipments plunged over 34% mom.

Malaysian palm oil futures hovered below MYR 4,500 per tonne on Friday, set for a second weekly decline, down about 1.4% so far. Weakness stemmed from softer soyoil prices in Chicago markets and sluggish exports, with cargo surveyors noting April 1–15 shipments fell over 34% mom amid muted festive demand. Easing Middle East tensions also pressured crude oil, dampening risk appetite. Still, losses were capped by a weaker ringgit and firmer edible oil prices on China's Dalian exchange. On the demand side, purchases from India, the largest consumer, are expected to rebound after March imports dropped 19% to a three-month low. Supply factors remained supportive, with inventories falling for a third month to a seven-month low. Meanwhile, Malaysia’s palm-based biodiesel consumption is projected to rise by more than 300,000 tonnes annually, according to the Malaysian Palm Oil Board, as the country joins top supplier Indonesia in boosting blending mandates to curb reliance on energy imports.