Palm Oil Extends Gains as Malaysian Markets Reopen

Malaysian palm oil futures jumped near 2% to near MYR 4,900 per tonne, extending the previous session’s rally and hitting a one-week high as traders returned from a holiday. Sentiment was lifted by firmer edible oils on the Dalian and Chicago exchanges, along with a weaker ringgit. Stronger crude oil prices also provided support amid renewed concerns over potential supply disruptions. Meanwhile, growing El Niño risks added to concerns over drier conditions and potential production losses across Southeast Asia. However, gains were tempered by weak export demand and ample supplies. Cargo surveyors estimated Malaysian palm oil exports fell between 11.4% and 20% during August 1-25 from the same period in July, while inventories climbed to a five-month high in July, reinforcing concerns over supply pressure. Demand from India could also face headwinds as refiners favour cheaper soyoil, although expectations for strong August vegetable oil imports may provide some underlying support.

Malaysian palm oil futures hovered near MYR 4,850 per tonne, rebounding from recent declines as firmer rival edible oils on Dalian and Chicago exchanges lifted sentiment. Elevated crude oil prices and mounting El Niño risks, which stoked concerns over dryness and weaker output across Southeast Asia, added support. Indonesia’s planned full rollout of its B50 mandate on October 1 is also expected to bolster domestic consumption and trim exportable supplies. However, futures were headed for their first weekly loss after three straight gains, down about 3.3% so far. Broader weakness reflected softer demand and ample supply, with cargo surveyors noting palm oil exports for August 1–25 fell between 11.4%–20% from July. Meanwhile, inventories hit a five-month high in July, intensifying supply pressure. Demand from India may face further headwinds as refiners turn to cheaper soyoil, with imports in August projected to be strong. Markets will be closed Monday for a holiday.

Malaysian palm oil futures traded above MYR 4,850 per tonne, rebounding from recent losses as a weaker ringgit boosted competitiveness and firmer edible oils on the Dalian exchange lent support. Bargain buying also emerged after prices touched a one-week low. Weather risks added to sentiment, with signs of a developing El Niño raising concerns over potential dryness and output cuts in major producers in Southeast Asia. Meanwhile, the B50 biodiesel mandate in top supplier Indonesia is slated for full implementation on October 1, reinforcing expectations of stronger domestic consumption and tighter export supply. However, gains were capped by softer soybean oil prices on the Chicago exchange and a further retreat in crude oil. On the demand side, cargo surveyors estimated Malaysian palm oil product exports for August 1–25 fell 11.4%–20% from the same period in July, underscoring sluggish momentum. Ample supply also weighed, with Malaysian inventories rising to a five-month high in July.