Palm Oil Extends Strength Despite Ample Supply

Malaysian palm oil futures pushed higher, hovering above MYR 4,740 per tonne and marking the strongest level in more than two weeks, as a softer ringgit boosted export competitiveness and firmer palm olein prices on the Dalian exchange also lent support. Export estimates reinforced the bullish tone, with cargo surveyors reporting Malaysian palm oil shipments increased between 2.6% and 14.8% in the first 10 days of August. Demand prospects in top consumer India also improved, with July edible oil imports climbing to a 10-month high as refiners stepped up palm oil and soyoil purchases ahead of the festive season. However, gains were capped by signs of abundant supply. Malaysia’s July inventories rose 3.32% month-on-month to 2.63 million tonnes, while production jumped 9.41% to 1.79 million tonnes. Meanwhile, in China, another key buyer, both consumer and producer price inflation eased in July, underscoring weak domestic demand that could limit further upside in palm oil.

Malaysian palm oil futures were notably higher, trading near MYR 4,720 per tonne and snapping recent losses, as firmer edible oil prices in Dalian and Chicago supported sentiment. Strong export demand added momentum, with a monthly report from the Malaysian Palm Oil Board showing July shipments up 14.5% from June to 1.39 million tonnes. Demand prospects in top buyer India also improved, as edible oil imports hit a 10-month high in July, with refiners stocking up on palm oil and soyoil ahead of the festive season. However, a stronger ringgit capped the gain. Meantime, Malaysia’s palm oil stocks rose 3.32% mom to 2.63 million tonnes in July, while production grew 9.41% to 1.79 million tonnes, highlighting ample near-term supply. In China, a key palm oil consumer, both CPI and PPI inflation eased in July, underscoring persistently weak domestic demand. Traders now await export estimates for August 1-10 from cargo surveyors after July shipments rose 12.1%-19.5% from June.

Malaysian palm oil futures hovered below MYR 4,700 per tonne, extending recent declines as weakness in Dalian palm olein and Chicago soyoil weighed on sentiment. Traders also grew cautious ahead of next week’s monthly report from the Malaysian Palm Oil Board, while Reuters survey pointed to July inventories at a five-month high as seasonal output outpaced demand. Even so, palm oil was still tracking a modest weekly advance of about 0.5% so far, recovering from prior losses. Demand prospects in top buyer India offered support, with July imports surging to a 10-month high as refiners stocked up on palm oil and soyoil ahead of festive demand amid tightening domestic supplies. Exports also underpinned prices, with cargo surveyors estimating July Malaysian palm oil shipments rose between 12.1% and 19.5% from June. In China, another major consumer, July trade data showed resilient exports and imports despite moderating growth, reinforcing a broadly supportive backdrop for commodity demand.