Key Takeaways
- Malaysian palm oil futures fell for the fourth consecutive session.
- Expectations of rising inventories and weak demand influenced the market.
- Benchmark palm oil contract dropped 0.87% to 4,768 ringgit a metric ton.
Malaysian palm oil futures experienced a fourth consecutive decline on Wednesday, driven by concerns over rising inventories and weak demand, according to market analysts.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 42 ringgit, or 0.87%, to 4,768 ringgit ($1,169.49) a metric ton at the close.
Paramalingam Supramaniam, a director at Selangor-based brokerage Pelindung Bestari, stated that end-stocks are likely to rise to 3 million metric tons, or slightly higher, by September-end, due to a double-digit increase in production, particularly in the state of Sabah.
Supramaniam added that demand remains sluggish, and the market cannot escape the influence of these overarching variables.
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.
The Dalian soyoil contract fell 0.27%, while its palm oil contract shed 1.43%. Soyoil prices on the Chicago Board of Trade were down 0.63%.
Palm oil prices track the movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Weaker crude oil futures, which make palm a less attractive option for biodiesel feedstock, also contributed to the decline.
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, while palm oil imports fell 26% to 0.56 million tons.
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, Selangor-based brokerage Pelindung Bestari
