Palm Oil Hits One-Month High on Oil Rally, Supply Risks

Malaysian palm oil futures surged around 1.8% to slightly above MYR 4,700 per tonne, extending recent gains to a one-month peak, as strength in rival edible oils on Dalian and Chicago exchanges boosted sentiment, along with surging crude oil prices amid persistent Middle East tensions. The biodiesel feedstock outlook improved further with higher blending mandates in Indonesia and Malaysia curbing export availability. Demand prospects in top consumer India also brightened after industry officials projected higher edible oil imports between July and October, as tighter domestic supplies ahead of festive demand are expected to boost purchases of palm oil. Weather risks added support after Malaysia’s meteorological agency warned record-high temperatures could affect output next year. Meanwhile, export data from cargo surveyors for July 1–20 were mixed, with AmSpec Agri Malaysia reporting shipments down 0.9% from June, while Intertek Testing Services estimated a 4.1% increase.

Malaysian palm oil futures extended losses, trading near MYR 4,600 per tonne and moving further away from a near four-week high, as weakness in rival edible oils on the Dalian and Chicago exchanges weighed on sentiment. Demand concerns also persisted after palm oil imports by top buyer India fell to a 14-month low in June, pointing to softer near-term buying interest. Meantime, export data for July 1–20 provided little direction, with AmSpec Agri Malaysia reporting shipments fell 0.9% from the same period in June, while Intertek Testing Services estimated a 4.1% increase. Still, losses were cushioned by a weaker ringgit and growing supply risks, with higher biodiesel mandates in Indonesia and Malaysia reducing export availability and providing underlying support to prices. Investors also looked to the upcoming Politburo meeting later this month in China, another major palm oil consumer, hoping for fresh stimulus after second-quarter growth undershot expectations.

Malaysian palm oil futures slipped below MYR 4,650 per tonne, pulling back from recent gains as traders locked in profits after prices hit a near four-week high. Weaker edible oil prices on the Dalian and Chicago exchanges also weighed on sentiment. Meanwhile, softer crude oil prices reduced support for biofuel feedstocks, following reports of renewed U.S.-Iran mediation efforts. Demand worries added to the slide after June palm oil imports in top consumer India dropped to a 14-month low, with narrowing price discounts curbing buying. Still, losses were capped by supply risks: Malaysia’s meteorological agency warned of record-high temperatures next year as El Niño intensifies, threatening yields. The U.S. Climate Prediction Center likewise noted El Niño strengthened last month and is expected to persist through early 2027. Export data for July 1–20 were mixed, with AmSpec Agri Malaysia reporting a 0.9% decline from June, while Intertek Testing Services estimated shipments rose 4.1%.