Palm Oil Rises After Recent Weakness

Malaysian palm oil futures edged lower, holding below MYR 4,700 per tonne after a recent two-week peak, weighed by profit-taking and softer crude oil prices amid mixed U.S.–Iran signals. Meanwhile, Malaysia trimmed its July crude palm oil reference price but kept the export duty at 10%. Still, losses were cushioned by a weaker ringgit and strength in rival edible oils on Dalian and Chicago exchanges. Simultaneously, export momentum stayed firm, with cargo surveyors reporting June 1–20 shipments up between 19.1% and 25% from the same period in May. Meanwhile, El Niño’s lingering impact continued to stoke forecasts of tighter output. In Indonesia, the world’s top producer, the B50 biodiesel mandate will roll out July 1 after successful fuel tests, lifting domestic demand prospects. In the meantime, India’s imports are expected to exceed 600,000 tonnes in June, following May’s 549,356 tonnes, underscoring steady appetite from the largest buyer.

Malaysian palm oil futures extended their recent gains, hovering above MYR 4,650 and climbing to their highest level in more than two weeks. Sentiment was supported by strength in rival edible oils on the Dalian and Chicago exchanges, alongside a weaker ringgit that improved the commodity's export competitiveness. Strong export demand also underpinned prices, with cargo surveyor Intertek Testing Services noting that Malaysian palm oil product shipments rose 19.1% during June 1-20 from the same period in May. Supply concerns added further support as the lingering effects of El Niño continued to fuel forecasts of lower production. Meanwhile, imports by top buyer India are expected to exceed 600,000 tonnes in June after rising to 549,356 tonnes in May, signaling firm demand. However, gains were capped by a sharp drop in crude oil prices after reports that the U.S. and Iran made progress in talks toward a broader agreement within 60 days, including efforts to end hostilities in Lebanon.

Malaysian palm oil futures hovered above MYR 4,600 per tonne, continuing their bullish momentum and notching a two-week high, lifted by a weaker ringgit and stronger exports. Cargo surveyors noted that palm oil shipments during June 1–15 rose between 9.6% and 23.8% from the same period in May. Meanwhile, imports by top buyer India are expected to exceed 600,000 tonnes in June after edging up to 549,356 tonnes in May. Expectations of lower production due to the lingering effects of El Niño also continued to support prices. In Indonesia, the world's largest palm oil producer, the B50 biodiesel mandate is set to take effect on July 1 after fuel tests delivered positive results, boosting the domestic demand outlook. Contracts are also on track to end the week over 3% higher, with sentiment further supported by the Malaysian Palm Oil Council's forecast that prices will hold between MYR 4,400 and MYR 4,650 in July. However, holidays in the Dalian and Chicago markets limited further upside.