Malaysian palm oil futures experienced a decline of over 1%, dropping to below MYR 3,750 per tonne. This marks the seventh consecutive decrease, driven by heightened expectations of production increases. According to the Southern Peninsular Palm Oil Millers Association, output between May 1st and 5th surged by 60% compared to the previous month. This price drop represents the lowest level since mid-September and has been influenced by reports of a 24% decrease in India's imports in April compared to March, maintaining below-average levels for the fifth month in a row. Market participants have adopted a cautious stance in anticipation of China's April trade data, scheduled for release this week.
Additionally, the upcoming monthly report from the Malaysian Palm Oil Council, expected next week, is predicted by Reuters to reveal an increase in April stocks for the second month, alongside a 16.9% rise in production – the highest since November. However, losses have been somewhat mitigated by the lessening of global trade tensions, with U.S. and Chinese officials planning to convene in Switzerland to discuss President Trump's tariff measures. In terms of exports, there may have been an uptick in April, with cargo surveyors noting a rise of 13.8% to 14.8%. Furthermore, China’s imports could potentially increase in May and June in preparation for heightened summer demand.
