Palm Oil Inches Up as Traders Await Monthly Data

Malaysian palm oil futures edged higher to near MYR 4,580 per tonne, extending gains after a rally snapped a recent slide. Support came from a weaker ringgit and firmer crude oil amid Middle East supply risks, lifting palm oil’s appeal as a biodiesel feedstock. Meanwhile, analyst Dorab Mistry sees prices holding between MYR 4,500–5,000 through December, capped by elevated inventories despite El Niño supply risks next year. In India, palm oil imports in the world’s largest importer are expected to stay steady in 2026/27 after a duty cut, with lower edible-oil tariffs ahead of the festive season offering near-term support. Gains were capped by weaker Chicago soyoils, while China’s Dalian exchange stayed shut for a holiday. Caution also grew ahead of Malaysian Palm Oil Board monthly data, with stocks seen peaking this month. In top grower Indonesia, Danantara Sumberdaya began testing a monitoring platform aimed at improving transparency in commodity exports, including palm oil.

Malaysian palm oil futures were little changed after recent weakness, with bargain hunters stepping in after prices hit their lowest since mid-July last week. Sentiment stayed fragile as futures held below MYR 4,500 per tonne, pressured by rising production, inventories seen topping three million tonnes, and sluggish exports. Cargo surveyors estimated September shipments fell 17.1%–28.8% month-over-month, underscoring demand concerns. Simultaneously, chicago soyoils edged higher, while Dalian markets were closed for China’s Golden Week. Analyst Dorab Mistry expects prices to hover between MYR 4,500–5,000 through December, with elevated stocks capping gains despite El Niño-driven supply risks next year. In top buyer India, palm oil imports are set to remain steady in 2026/27 after a duty cut, while lower edible-oil tariffs ahead of the festive season may lift near-term demand. Still, weaker crude oil prices following a G7 stock release reduced palm oil’s appeal as a biodiesel feedstock.

Malaysian palm oil futures extended their decline, lingering below MYR 4,550 per tonne at their lowest level since mid-July. For the week, futures are heading for a second straight weekly loss, down around 3.1% so far. Sentiment was pressured by rising inventories, with August stocks reaching an eight-month high and expected to surpass 3 million tonnes in September. Weak demand further weighed on sentiment, with cargo surveyors estimating a 17.1%-28.8% mom drop in palm oil exports for September. Meanwhile, China’s Dalian markets were closed for a Golden Week holiday, limiting trading cues. Still, losses were tempered by forecasts that palm oil imports by top buyer India will remain steady in the 2026/27 marketing year following an import-duty cut. Lower edible-oil duties ahead of the festive season could also support near-term demand. Elevated crude oil prices offered additional support amid persistent Middle East uncertainty, improving the appeal of palm oil as a biodiesel feedstock.