Palm Oil Extends Decline as Monthly Data Looms

Malaysian palm oil futures extended losses, hovering below MYR 4,550 per tonne as weaker Chicago soyoil weighed on sentiment. Caution also prevailed ahead of Malaysian Palm Oil Board monthly data, with stocks expected to peak this month. Sluggish demand added pressure, with cargo surveyors estimating a 17.1%-28.8% month-on-month drop in palm oil exports in September. European Union palm oil imports for the 2026/27 season, which began in July, also fell 18% year-on-year to 0.71 million tonnes. In Indonesia, the forestry task force handed nearly 260,000 hectares of reclaimed land to the Forestry Ministry, with more than half set to be managed by Agrinas Palma Nusantara, potentially adding to longer-term supply. Still, a softer ringgit and firmer crude oil prices amid Middle East supply constraints helped limit losses by supporting palm oil’s appeal as a biodiesel feedstock. Meanwhile, China's Dalian markets will resume activity on Thursday.

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.