FX.co ★ Palm Oil Extends Declines, Hovers Below MYR 3,850

Malaysian palm oil futures have dipped more than 1%, settling below MYR 3,850 per tonne, extending losses into a second consecutive session as production shows signs of increase. The Southern Peninsular Palm Oil Millers' Association reported a 3.7% rise in output for the first 20 days of May compared to April. The Malaysian Palm Oil Council anticipates continued production growth from May through September, following a spike in April output caused by March's harvesting delays due to the monsoon. Concurrently, Malaysia has reduced its June crude palm oil reference price, positioning it within the 9.5% export duty category, which may exert additional downward pressure on prices. Nevertheless, despite the recent decline, futures have gained approximately 0.8% this week, recovering from the previous week's weakness, aided by an uptick in exports. Cargo surveyors have estimated an increase in Malaysian palm oil shipments by 1.6% to 5.3% during May 1–20 compared to the same timeframe in April. Additionally, palm oil imports from India, the largest consumer, are projected to recover in May after remaining below average levels since December.