Palm Oil Jumps Past MYR 4,500

Malaysian palm oil futures eased, hovering below MYR 4,530 per tonne after two days of gains, pressured by weaker Chicago soyoil and softer crude oil. On the demand side, export prospects weakened after AmSpec Agri Malaysia noted that shipments during the May 1-15 period fell 16.5% from the same period in April. In India, the world’s largest palm oil importer, purchases dropped 26% in April from March to a four-month low, weighed by softer institutional demand and a narrower discount to rival oils. Separately, Malaysia cut its June crude palm oil reference price while keeping the export duty unchanged at 10%. Caution also persisted after the Malaysian Palm Oil Council projected palm oil prices to stay near MYR 4,400 per tonne in June despite support from global biofuel policies and weather-related supply risks. Still, losses were tempered by firmer Dalian edible oil prices and Malaysia’s plan to raise its biodiesel mandate to B15 from B10 starting June 1, aimed at curbing fuel imports.

Malaysian palm oil futures surged more than 2% to above MYR 4,500 per tonne, extending recent gains and reaching their highest level in a week. A weaker ringgit, firmer Dalian palm oil contracts, and stronger Chicago soyoil boosted sentiment. Meanwhile, crude oil prices sharply strengthened as efforts to end the U.S.-Israeli war with Iran appeared to stall, raising concerns over supply disruptions and boosting the broader edible oils complex. However, upside was capped by weak exports, with AmSpec Agri Malaysia reporting shipments down 16.5% mom in the first half of May. Demand concerns lingered as April activity data in China, a key buyer, signaled slowing momentum. In top consumer India, palm oil imports fell 26% in April from March, hitting a four-month low, due to weaker institutional buying and a narrower discount to rival oils. Separately, Malaysia has lowered its June crude palm oil reference price but kept the export duty steady at 10%.

Malaysian palm oil futures strengthened, hovering above MYR 4,400 per tonne and rebounding from the downside since early May. Sentiment was supported by a weaker ringgit, alongside firmer soyoil prices in Chicago and a sharp rise in crude oil prices amid concerns over ship attacks and seizures in the Strait of Hormuz. Markets also monitored a second day of talks between the U.S. and Chinese presidents in Beijing, with investors hoping for signs of easing trade tensions. However, palm oil contracts were still on track for a third straight weekly decline, down roughly 1.7% so far, pressured by softer demand from key buyer India. The country’s palm oil imports plunged 26% in April from March to hit the lowest level in four months, as institutional buying softened and palm oil’s price discount against rival edible oils narrowed. Meanwhile, export data for the first ten days of May remained mixed, with AmSpec Agri reporting shipments fell 10.8%, while Intertek estimated an 8.5% growth.