Palm Oil Set for 3rd Straight Weekly Gain

Malaysian palm oil futures extended gains, holding above MYR 4,800 per tonne amid strength in rival edible oils and a tightening supply outlook linked to severe El Niño conditions and Indonesia's upcoming B50 biodiesel mandate. Robust exports also supported prices, with cargo surveyors reporting a 58.5%–78.4% surge in shipments during Oct. 1–20 from the same period in Sept. Festival-related buying from India, the world's largest palm oil importer, has been a key demand driver. The Malaysian Palm Oil Council expects prices to stay above MYR 4,600 in Nov., noting that India and China may increase their reliance on palm oil amid anticipated supply constraints in sunflower and soybean oils. Elevated energy prices further supported prices by strengthening biodiesel demand prospects. However, gains were tempered by softer food-sector demand amid lingering inflation pressures. For the week, futures were on track for a third consecutive weekly rise, up nearly 1% so far.

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.