Malaysian palm oil futures fell back below MYR 4,700 per tonne, erasing recent gains as a stronger ringgit and weaker Chicago soyoil prices weighed on sentiment. The retreat in crude oil prices added further pressure, as lower energy costs tend to curb biodiesel demand and, in turn, palm oil usage.
Additional headwinds emerged from a Reuters poll indicating that Malaysia’s palm oil inventories likely climbed to a five-month high in July, in line with seasonally stronger production. Traders also adopted a cautious stance ahead of China’s July trade figures, which are expected to provide fresh clues on demand from one of the world’s largest palm oil consumers.
However, the downside was limited by firmer edible oil prices on the Dalian exchange and robust export activity. Cargo surveyor data showed Malaysia’s palm oil exports in July were estimated to have risen by 12.1% to 19.5% from June. In India, the top buyer, edible oil imports reached a 10-month high in July as refiners ramped up purchases of palm oil and soyoil to rebuild stocks ahead of the festive season, amid tightening domestic supplies.
