Palm Oil Rallies to a Two-Week High on Supply Concerns

Malaysian palm oil futures jumped almost 2% to above MYR 4,650 per tonne, extending recent gains to their highest level in two weeks. Sentiment was boosted by stronger edible oil prices on the Dalian and Chicago markets, alongside a weaker ringgit. Prices also drew support from reports that Indonesia, the top supplier, plans tighter oversight of commodity exports, including palm oil and coal, to boost state revenue. Supply concerns added momentum after rising input costs prompted Malaysian growers to scale back replanting, delaying a process vital for long-term output. Elevated vegetable oil prices have further discouraged replanting. However, upside was capped by weak demand signals. AmSpec Agri Malaysia estimated exports during May 1–15 fell 16.5% from April. Meanwhile, April imports by India, the largest consumer, dropped 26% from March to a four-month low, pressured by softer institutional demand and a narrowing price discount against rival oils.

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%.