Palm Oil Eases on Firmer Ringgit, Weaker Edible Oils

Malaysian palm oil futures fell to near MYR 4,650 per tonne, reversing recent gains amid a stronger ringgit and weaker rival edible oils on the Dalian and Chicago exchanges. Meanwhile, crude oil prices eased as tanker traffic through the Middle East continued despite persistent regional tensions, reducing support for vegetable oil markets. Separately, European Union palm oil imports for the 2026/27 marketing year, which began in July, plunged by 39% yoy. Still, losses were capped by stronger exports, with cargo surveyors noting palm oil shipments for July 1–25 rose between 8.1% and 15.9% from the same period in June. Demand was also lifted by expectations that palm oil imports by top buyer India could increase between July and October ahead of the festive season. In Indonesia, the world's largest producer, authorities have raised the 2026 palm oil-based biodiesel allocation to 16.75 million kilolitres to accommodate additional demand from the B50 mandate launched earlier this month.

Malaysian palm oil futures bounced back to trade above MYR 4,650 per tonne, recovering from recent losses as stronger Dalian palm oil and Chicago soybean oil prices improved sentiment. Higher crude oil prices, supported by a drawdown in U.S. crude inventories, also boosted the biodiesel outlook. On the demand front, cargo surveyors estimated Malaysia's palm oil exports for July 1–25 increased between 8.1% and 15.9% from the same period in June. Meanwhile, palm oil imports by top buyer India are expected to rise between July and October as tighter edible oil supplies ahead of the festive season lift buying interest. In top grower Indonesia, the government is negotiating with the U.S. for an exemption from the new 10% tariff on palm oil exports, seeking to preserve the competitiveness of its shipments. Still, gains were capped by a stronger ringgit and reports that European Union palm oil imports for the 2026/27 marketing year, which began in July, plunged 39% yoy to 0.13 million tonnes.

Malaysian palm oil futures remained under pressure, extending recent losses to trade below MYR 4,650 per tonne as weaker rival edible oils on the Dalian and Chicago exchanges weighed on sentiment. Prices moved further away from last week's 15-week high amid a sharp decline in crude oil prices after the U.S. paused strikes on Iran, reducing support by weakening the biodiesel outlook. Still, losses were capped by stronger export demand, with cargo surveyors estimating that July 1–25 palm oil shipments rose between 8.1% and 15.9% from the same period in June. Additional support came from higher biodiesel blending mandates in exporting countries such as Indonesia and Malaysia. Meanwhile, palm oil imports by top buyer India are expected to rise between July and October as tighter edible oil supplies ahead of the festive season boost demand. Weather also remained supportive, with Malaysia warning that record-high temperatures could curb output next year.