Malaysian palm oil futures slipped below MYR 4,650 per tonne, erasing recent gains as weakness in rival vegetable oils on the Dalian and Chicago exchanges weighed on market sentiment. The benchmark contract was on track to end the week down about 1.7%, snapping a three-week winning streak, after Indonesia—the world’s largest palm oil producer—lowered its August crude palm oil reference price to USD 996.52 per tonne from USD 1,000.90 in July.
Even so, prices remained roughly 2% higher for the month, marking the first monthly increase in four months. The market drew support from an almost 20% rally in crude oil during July, as easing Middle East tensions following U.S.-Iran diplomatic efforts improved the appeal of palm oil as a biodiesel feedstock. Export demand also held firm: cargo surveyors reported that shipments in July 1–25 were up between 8.1% and 15.9% compared with the same period in June.
Additional support came from higher biodiesel blending mandates in Indonesia and Malaysia, ongoing weather-related risks to Malaysia’s palm output next year, and expectations of stronger purchases by top importer India between July and October ahead of key festive-season demand.
