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Palm Oil

Palm Oil Set for Third Straight Weekly Decline

Malaysian palm oil futures edged lower, hovering below MYR 4,900 per tonne and extending their recent decline amid bearish monthly data from the Malaysian Palm Oil Board. In August, inventories rose 7.48% mom to an eight-month high of 2.82 million tonnes, while exports fell 7.5% to 1.29 million tonnes. Production, meanwhile, rose 1.39% to 1.82 million tonnes, adding to concerns over ample supplies. Early September shipments also remained weak, with cargo surveyors reporting that palm oil exports fell 11.7–17.5% in the first 10 days of the month from the same period in August. Higher crude oil prices capped weakness, with Brent rising above US$100 a barrel amid Middle East uncertainty, boosting palm oil’s appeal as a biodiesel feedstock. Unusually dry conditions and low rainfall in Indonesia and Malaysia over the past six weeks, exacerbated by reduced fertiliser application, also offered some support. Contracts are heading for a third straight weekly drop, down around 0.9% so far.

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