Key Takeaways
- Malaysian palm oil futures fell by over 1% for the fourth consecutive session.
- Expectations of increased inventories and weak demand drove the market.
- Palm oil prices tracked rival edible oils, reflecting global market trends.
Malaysian palm oil futures experienced a significant drop, declining by more than 1% for the fourth consecutive session, according to the Bursa Malaysia Derivatives Exchange.
The benchmark palm oil contract for December delivery fell 71 ringgit, or 1.48%, to 4,739 ringgit ($1,163.80) a metric ton by midday, reflecting ongoing market concerns.
Paramalingam Supramaniam, a director at Selangor-based brokerage Pelindung Bestari, stated that the market is aware of the potential rise in end-stocks to 3 million metric tons or slightly higher by September-end, driven by a double-digit increase in production, particularly in the state of Sabah.
Demand remains sluggish, and the market is influenced by these factors, according to industry experts.
Cargo surveyors estimated that exports of Malaysian palm oil products for September 1 to 20 fell between 12.8% and 24.7% from the previous month.
In related developments, Dalian’s most-active soyoil contract fell 0.61%, while its palm oil contract shed 1.79%. Soyoil prices on the Chicago Board of Trade were down 0.97%.
Palm oil prices are closely tied to the movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The drop in palm oil prices also reflects weaker crude oil futures, which make palm a less attractive option for biodiesel feedstock.
European Union soybean imports for the 2026/27 season, which began in July, had reached 2.67 million tons by September 20, down 14% from the previous year. Palm oil imports fell 26% to 0.56 million tons, according to European Commission data.
The market is well aware that end-stocks will likely rise to 3 million metric tons, or slightly higher by September-end, driven by a double-digit increase in production, particularly in the state of Sabah.
Paramalingam Supramaniam, Director at Selangor-based brokerage Pelindung Bestari
