Palm Oil Edges Higher as Export Demand Offsets Ample Supply

Malaysian palm oil futures inched up, hovering above MYR 4,750 per tonne after recent losses, supported by robust exports and stronger demand prospects. Cargo surveyors reported a 58.5%–78.4% surge in shipments during October 1–20 from the same period in September, while festival-related demand from India, a key importer, further bolstered sentiment. Higher crude oil prices also lent support by enhancing palm oil’s competitiveness as a biodiesel feedstock. Meanwhile, Malaysia is considering a temporary waiver or reduction of its 10% crude palm oil export tax to help clear record-high inventories and improve global price competitiveness. Stocks reached an all-time high of 3.51 million tonnes in September. However, gains were capped by weaker palm olein futures in Dalian and lower soyoil prices in Chicago. Seasonal production is also expected to remain elevated in October following six consecutive monthly increases, reinforcing concerns over ample supplies.

Malaysian palm oil futures edged lower towards MYR 4,800 per tonne as traders took profits after prices approached a four-week high. Sentiment was also dampened by record inventories of 3.51 million tonnes in September, while seasonal production is expected to stay elevated in October after six consecutive monthly rises. Still, losses were tempered by firmer edible oil prices on the Dalian and Chicago markets. Exports offered support, with cargo surveyors reporting a 43.2%–58.3% mom surge in palm oil shipments during the first half of October. Festival-related demand from India, a key importer, further lifted risk appetite. Meanwhile, Indonesia raised its October crude palm oil reference price to USD 1,042.15 per tonne, while rising crude oil prices enhanced palm oil’s competitiveness as a biodiesel feedstock. Traders now monitor Malaysia’s consideration of a waiver or reduction in its crude palm oil export tax, which could improve its competitiveness against Indonesian supplies.

Malaysian palm oil futures traded around MYR 4,800 per tonne, rebounding from recent weakness amid firmer edible oils on China’s Dalian exchange. Export strength provided further support, with cargo surveyors reporting a 43.2%–58.3% month-on-month surge in Malaysian palm oil shipments in the first half of October. Festival-driven demand from India, a key importer, also bolstered sentiment. Meanwhile, Indonesia raised its October crude palm oil reference price by 3.44% to USD 1,042.15 per tonne, while elevated crude oil prices supported palm oil’s competitiveness as a biodiesel feedstock. Supply concerns added support, as Indonesia’s planned B50 biodiesel mandate could boost domestic consumption, while El Niño-related risks threatened production. However, gains were capped by ample supply, with Malaysian palm oil inventories climbing to a record 3.51 million tonnes in September amid seasonal peak output.