Palm Oil Rises After Recent Weakness

Malaysian palm oil futures edged lower, hovering below MYR 4,600 per tonne after recent gains amid softer edible oil prices on the Dalian markets. Demand concerns also pressured risk appetite, as palm oil imports by top buyer India fell to a 14-month low in June after a narrower discount to rival oils curbed purchases. Meanwhile, China's economy grew at its slowest pace since late 2022 in Q2, raising concerns over demand from another key importer. Despite the pullback, the contract remained on track for its first weekly gain in four, up about 1.7%, lifted by improving export prospects. Cargo surveyors noted palm oil shipments during July 1-15 rose between 4% and 12.4% from the same period in June. Meanwhile, Malaysia raised its August crude palm oil reference price, keeping the export duty at 10%. Crude oil prices also stayed elevated amid limited flows through the Strait of Hormuz as the U.S. and Iran intensified attacks, lending support to palm oil through stronger biodiesel demand.

Malaysian palm oil futures rose modestly to trade above MYR 4,550 per tonne after recent weakness, supported by stronger export prospects. Cargo surveyors estimated that palm oil shipments during July 1-15 increased between 4% and 12.4% from the same period in June, pointing to firmer overseas demand. Malaysia also raised its August crude palm oil reference price, keeping the export duty at 10%. Meanwhile, crude oil prices remained elevated amid supply disruptions in the Strait of Hormuz, reinforcing palm oil's appeal as a biodiesel feedstock. However, gains were capped by a stronger ringgit and weaker rival edible oils on the Dalian and Chicago exchanges. Additional pressure came from softer demand prospects in key importing markets. In India, palm oil imports fell to a 14-month low in June as a narrower discount to competing oils curbed buying interest, while China's economy expanded at its slowest pace since late 2022 in Q2, raising concerns over future demand.

Malaysian palm oil futures edged lower after recent gains, hovering below MYR 4,600 per tonne amid a firmer ringgit and weaker demand prospects from major buyer China as the economy grew at its slowest pace in 3-1/2 years. In India, the top palm oil importer, purchases fell to a 14-month low in June as demand fell and a narrowing price discount to rival oils reduced buying interest. Meanwhile, the EU confirmed imports of palm oil derivatives will be subject to its anti-deforestation rules from December 2027. Still, losses were capped by strength in rival edible oils on the Dalian and Chicago markets, along with stronger crude oil prices after U.S. President Trump reimposed a naval blockade in the Strait of Hormuz. Meanwhile, the B50 biodiesel mandate in Indonesia, the largest supplier, is expected to spur domestic palm oil consumption. Traders now await export data for the first half of July, after shipments rose 1.6%–5.1% in the July 1–10 period compared with the same period in June.