Palm Oil Slips Below MYR 4,500 Amid Inventory Build

Malaysian palm oil futures fell over 1% to trade below MYR 4,500 per tonne, pressured by weaker palm olein prices on the Dalian exchange. Sentiment was also weighed by monthly data from the industry regulator, which showed inventories rose in April for the first time in four months as production grew while exports fell. Demand concerns also lingered after India, the world’s largest palm oil buyer, reported a 27% mom drop in April imports to a one-year low. Still, losses were limited by a softer ringgit and firmer crude oil prices, as negotiations to end the conflict between the U.S. and Iran appeared increasingly fragile. On the policy front, Malaysia will raise its biodiesel mandate to B15 from B10 starting June 1, a move aimed at reducing fuel imports. Meanwhile, export data for early May was mixed. Cargo surveyor Intertek Testing Services estimated exports of Malaysian palm oil products during May 1–10 rose 8.5%, while AmSpec Agri Malaysia noted that shipments declined 10.8%.

Malaysian palm oil futures inched higher to MYR 4,515 per tonne, halting recent declines amid a weaker ringgit and firmer edible oils on the Dalian and Chicago markets. Meanwhile, crude oil prices strengthened as the U.S. and Iran failed to agree to a peace proposal drafted by Washington, boosting expectations for biodiesel demand. Higher exports further lifted sentiment, as cargo surveyor Intertek Testing Services noted that exports for May 1-10 rose 8.5% from the same period in April. On the policy front, Malaysia will roll out a B15 biodiesel mandate from June 1, up from the current B10, to curb fuel imports and spur domestic consumption. However, upside was capped by monthly data from the Malaysian Palm Oil Board showing April stocks rose 1.71% from the prior month to 2.31 million metric tonnes, with output surging 18.37% to 1.63 million tonnes. Meanwhile, demand concerns persisted as India, the world’s largest palm oil buyer, saw April imports plunge 27% mom to a one-year low.

Malaysian palm oil futures traded below MYR 4,550 per tonne, extending recent losses as weakness in Dalian edible oils weighed on sentiment. The market is heading for a second straight weekly decline, down about 0.8% so far, reflecting demand concerns. April imports by top consumer India plunged 27% month-over-month to a one-year low, adding to bearish sentiment. Meanwhile, cargo surveyors estimated Malaysia’s exports during April 1–25 fell 15.7%–16.8% from March, linked to softer post-festive buying. Still, losses were partly cushioned by a weaker ringgit and firmer Chicago soyoil. Crude oil prices also climbed on renewed U.S.–Iran tensions, boosting expectations for stronger biofuel demand. Domestically, Malaysia will implement its B15 biodiesel mandate from June 1, raising the blend from the current B10 to curb fuel imports and support palm oil consumption. Market participants now await monthly data from the Malaysian Palm Oil Board due Monday for clearer supply-demand signals.