Palm Oil Extends Gains After Holiday Break

Malaysian palm oil futures rose for a second straight session, hovering above MYR 4,500 per tonne as trading resumed after a holiday break. Support came from a weaker ringgit, concerns over softer Malaysian output, and firmer edible oils in Dalian and Chicago markets. Simultaneously, crude oil prices surged as Washington–Tehran tensions escalated, despite ongoing peace talks, adding upside support to palm oil through its biodiesel link. Meanwhile, top producer Indonesia plans to channel key commodity exports, including palm oil, through a state-run firm starting in September, a move that could benefit Malaysian palm oil shipments. However, gains were capped by an uncertain demand outlook from India, the world's largest importer, after the country’s palm oil imports plunged 26% in April to a four-month low. Weak export demand also weighed, with cargo surveyors noting that Malaysian palm oil exports during May 1–25 fell between 14.5% and 18.0% from the same period in April.

Malaysian palm oil futures rose modestly to near MYR 4,500 per tonne, rebounding from prior losses amid a weaker ringgit and firmer edible oils on the Dalian exchange. Crude oil strength also provided support after U.S. defensive actions in southern Iran boosted the broader vegetable oil complex. Meanwhile, the top producer, Indonesia, exported 2.17 million metric tons of palm oil products in March, down from 2.88 million tons in March 2025, according to an industry association. Jakarta plans to route commodity shipments through a state-run firm starting September, a move seen as potentially aiding Malaysian flows in the interim. However, gains were capped by weak exports. Cargo surveyors noted that Malaysian palm oil exports for May 1–25 fell between 14.5% and 18.0% from April. Demand prospects from India, the world’s largest palm oil importer, also remained uncertain after imports plunged 26% in April to a four-month low. Markets will be closed on Wednesday for a holiday.

Malaysian palm oil futures fell over 1% to below MYR 4,500 per tonne, reversing gains from the prior session amid a stronger ringgit and weakness in Dalian edible oils. Meanwhile, the Chicago market was closed for a holiday. Broader energy markets also pressured sentiment, with crude oil prices slipping to two-week lows on optimism that the U.S. and Iran were moving closer to a peace deal. Weak exports further weighed on risk appetite, with cargo surveyors noting that palm oil shipments during May 1–20 dipped between 13.9% and 20.5% from April. In India, the world’s largest palm oil buyer, imports shrank 26% in April to a four-month low due to softer institutional demand and a narrowing price discount. Still, Losses were tempered by tighter exports in top grower Indonesia, set to phase in June–August ahead of full implementation in September, which could benefit Malaysia. Jakarta will also lift its biodiesel mandate to B50 in July, while Malaysia plans to raise blending to B15 in June.