Palm Oil Stays Below MYR 4,700 on Weak Demand

Malaysian palm oil futures extended losses, remaining below MYR 4,700 per tonne and hovering near a six-week low amid weakness in competing edible oils on the Dalian and Chicago markets. Bearish sentiment was reinforced by sluggish exports, with cargo surveyors estimating Malaysian palm oil shipments dipped 15.1%–24.3% in the first 25 days of September from the same period a month earlier. Meanwhile, expectations of higher Malaysian inventories and subdued Indian demand in September added pressure, although India’s recent duty cuts could support imports ahead of the festive season. Industry officials said the effects of El Niño have yet to materialise in palm oil production. Still, losses were tempered by firmer crude oil prices following President Trump’s rejection of Iran’s conditional offer to reopen the Strait of Hormuz. Meanwhile, a potentially shorter-than-usual wet season in Indonesia from November could pose risks to crop conditions.

Malaysian palm oil futures slipped around 2% to below MYR 4,700 per tonne, extending last week’s decline to a six-week low. A stronger ringgit and weaker soybean oil on the Chicago Board of Trade weighed on sentiment. Meanwhile, a pullback in crude oil after recent gains added pressure amid expectations that the Strait of Hormuz could reopen and U.S. curbs on Iranian exports could ease. Rising Malaysian inventories and sluggish demand from India, the world’s largest vegetable-oil buyer, further dampened the market, though industry officials noted El Niño’s impact has yet to materialise. Still, losses were partly cushioned by India’s move to cut import duties on crude and refined vegetable oils ahead of the September–November festive season to curb food inflation. On the supply side, Indonesia may face a shorter-than-usual wet season from November, potentially affecting crop conditions. For the week, futures are down about 4.6%, erasing the prior week’s gains in a steep reversal.

Malaysian palm oil futures strengthened, hovering near MYR 4,790 per tonne after recent declines, boosted by a weaker ringgit, firmer edible oils on the Dalian market, and India’s decision to cut basic import duties on crude and refined vegetable oils ahead of the September–November festive season, in an effort to curb domestic food inflation. Supply concerns also lent support, as top supplier Indonesia is expected to face a shorter-than-usual wet season from November, potentially affecting crops. However, the upside was tempered by expectations of higher Malaysian inventories, with a brokerage forecasting end-stocks to reach around 3 million tonnes, or slightly higher, by September-end, driven by a double-digit rise in production, particularly in Sabah. Exports also stayed sluggish, with cargo surveyors noting shipments fell between 12.8%–24.7% mom during September 1–20. In the energy market, softer crude prices amid improving Gulf supply also weighed on sentiment.