Palm Oil Slips to Near Two-Week Low Despite Strong Exports

Malaysian palm oil futures rebounded from recent declines, hovering above MYR 4,700 per tonne as bargain hunting emerged after prices hit a near two-week low. A weaker ringgit and firmer soyoil prices on the Dalian market also lent support, alongside a recovery in crude oil prices that improved palm oil's appeal as a biodiesel feedstock. Expectations of dwindling supplies next year due to El Niño-related weather risks and stronger domestic biodiesel demand in top producer Indonesia further boosted sentiment. On the demand side, cargo surveyors reported a 46.9%–67.7% surge in shipments during October 1–25 from the same period in September, partly supported by festive buying from India, the world's largest palm oil importer. The Malaysian Palm Oil Council expects prices to remain above MYR 4,600 in November, lifted by potential increases in Indian and Chinese purchases amid tightening supplies of competing edible oils. However, record-high Malaysian inventories continued to cap gains.

Malaysian palm oil futures extended losses, declining more than 1-1/2% to trade near MYR 4,700 per tonne and approaching a two-week low. Weakness in Dalian and Chicago edible oils weighed on sentiment, alongside record-high September stocks. Easing crude prices amid renewed Middle East diplomacy further reduced energy-market support. Still, losses were cushioned by expectations of tighter crop yields next year due to adverse weather linked to El Niño. On the demand side, cargo surveyors reported a 58.5%–78.4% surge in shipments during October 1–20 from the same period in September, supported by festive buying from India, the world's largest palm oil importer. The Malaysian Palm Oil Council expects prices to remain above MYR 4,600 in November, as India and China may increase purchases amid tightening supplies of competing oils. Further ahead, Indonesia's planned B50 biodiesel mandate is expected to boost domestic consumption and support demand in the world's largest palm oil producer.

Malaysian palm oil futures fell below MYR 4,800 per tonne, reversing recent gains amid weakness in Dalian palm oil and Chicago soyoils. Lower crude oil prices added pressure by reducing the relative appeal of palm oil for biodiesel production, while softer food-sector demand amid persistent inflationary pressures also weighed on sentiment. However, losses were limited by robust exports, with cargo surveyors reporting a 58.5%–78.4% surge in shipments during Oct. 1–20 from the corresponding period in September. Festival-related buying from India, the world's largest palm oil importer, provided additional support. For November, the Malaysian Palm Oil Council expects prices to remain above MYR 4,600, as India and China may turn to palm oil amid anticipated tightening sunflower and soybean oil supplies. Longer term, Indonesia's upcoming B50 biodiesel mandate is expected to underpin demand, given its potential to increase consumption in the top-producing country.