Palm Oil Rebounds After Recent Weakness

Malaysian palm oil futures strengthened, hovering above MYR 4,850 per tonne and snapping recent declines. Firmer soyoils on the Chicago markets supported sentiment, along with elevated crude oil prices as geopolitical risks in the Middle East persisted. Expectations of tighter supplies also lent support, as Indonesia’s B50 biodiesel mandate is set to divert more palm oil to domestic use, while El Niño risks could curb output in both Indonesia and Malaysia. Demand prospects improved as palm oil imports by top consumer India rose 7% from July to 782,761 tonnes in August, the highest since February, as refiners replenished stocks ahead of the festival season. Separately, Malaysia raised its October crude palm oil reference price while keeping the export duty at 10%. However, gains were tempered by weakness on the Dalian exchanges and signs of sluggish exports, with cargo surveyors estimating Malaysian palm oil product shipments fell between 12.8%–24.7% mom during September 1–20.

Malaysian palm oil futures edged higher, hovering near MYR 4,900 per tonne after recent weakness, supported by firmer soyoils on China’s Dalian markets and expectations of tighter supplies. Indonesia’s B50 biodiesel mandate is set to divert more palm oil to domestic use, while El Niño risks could curb output in both Indonesia and Malaysia. Demand prospects also improved as palm oil imports by top consumer India rose 7% from July to 782,761 tonnes in August, the highest since February, with refiners replenishing stocks ahead of the festival season. Separately, Malaysia raised its October crude palm oil reference price but kept the export duty at 10%. However, a stronger ringgit tempered gains, along with weaker crude oil prices amid renewed efforts to ease Middle East tensions. Market focus now turns to a potential import tariff cut in India, with an official announcement expected soon that could sway demand for Malaysian palm oil.

Malaysian palm oil futures hovered below MYR 4,910 per tonne, reversing recent gains as weakness in rival edible oils on Dalian and Chicago markets weighed on sentiment. Prices also pulled back from a 21-month high on profit-taking, while sluggish exports added pressure, with cargo surveyors estimating September 1–15 palm oil shipments fell between 17.8% and 25.6% from August. Crude oil also eased as extra cargoes tempered supply concerns, reducing palm’s biodiesel appeal. Even so, futures were still on track for a weekly gain of about 1.9%, supported by expectations of tighter supplies ahead. Indonesia’s B50 mandate is set to divert more palm oil to domestic use, while El Niño risks could curb output in both Indonesia and Malaysia. In India, imports rose 7% in August to 782,761 tonnes, the highest since February, as refiners replenished stocks ahead of the festival season. Separately, Malaysia raised its October crude palm oil reference price but kept the export duty unchanged at 10%.