Palm Oil Pulls Back on Profit-Taking, Weak May Exports

Malaysian palm oil futures traded below MYR 4,650 per tonne, retreating from a recent rally as investors locked in profits after prices reached a two-week high. Sentiment was also pressured by weakness in competing edible oils on the Dalian and Chicago exchanges, while lower crude oil prices reduced support for the vegetable oil complex. Fundamentals remained bearish as a Reuters survey projected Malaysia's palm oil inventories to rise for a second straight month in May, with sluggish exports offsetting lower output. Cargo surveyors reported shipments fell 8.8%–15.5% in May from April, underscoring weak overseas demand. Meanwhile, palm oil purchases by India, the world's largest buyer, increased slightly from April's four-month low but remained below normal levels. Moreover, uncertainty over Indonesia’s export policies and stronger competition from alternative oils added pressure. Still, a softer ringgit helped cushion losses by improving the appeal of Malaysian exports.

Malaysian palm oil futures rose more than 1% to near MYR 4,600 per tonne, bouncing back from subdued trade as markets reopened after a long holiday. Support came from a weaker ringgit, firmer Chicago soyoil, and elevated crude oil prices amid stalled U.S.–Iran talks that reinforced biodiesel demand prospects. In top buyer India, palm oil purchases edged higher in May from April's four-month low but remained below typical levels. Meanwhile, Indonesia, the world's largest producer, exported 7.72 million tonnes of crude and refined palm oil during the first four months of 2026, up 20.4% from a year earlier, according to official data. However, gains were limited by weakness in edible oils traded on China's Dalian exchange. Concerns over soft export demand also persisted, with cargo surveyors reporting that Malaysian palm oil shipments during May 1–25 fell between 14.5% and 18.0% from April levels, partly reflecting the absence of festive buying demand.

Malaysian palm oil futures hovered around MYR 4,550 per tonne, extending recent gains amid firmer edible oil prices on the Dalian Exchange and concerns over softer Malaysian output. Sentiment remained supported by top supplier Indonesia’s plan to route key commodity exports, including palm oil, through a state-run trading firm starting in September, a move that could potentially benefit Malaysian shipments. However, contracts are on track for a second monthly drop, weighed by sluggish exports. Cargo surveyors noted exports during May 1–25 fell between 14.5% and 18.0% from April, partly due to the absence of festive buying. Demand outlook from India, the world’s largest palm oil importer, stayed uncertain after imports plunged 26% to a four-month low in April. Separately, crude oil prices are on track to post a steep monthly fall as reports of a tentative extension of the U.S.–Iran ceasefire eased fears of supply disruptions in the Middle East. Markets will resume trading on Wednesday.