FX.co ★ Palm Oil Prices Jump on Indian Import Duty Cut

Malaysian palm oil futures rose by over 2%, surpassing MYR 3,950 per tonne, as trading resumed following Monday's break. This increase reversed the previous session's losses and was primarily influenced by India's recent decision to cut import duties on crude edible oils, including palm oil, soyoil, and sunflower oil, to 10%. This move aims to address domestic inflation and ensure stable supply chains. The reduction in import duties is anticipated to enhance Malaysian palm oil exports and bolster demand. Furthermore, data from cargo surveyors indicated that Malaysian shipments increased by 7.3% to 11.6% between May 1 and May 25. Despite this, prices are struggling to rebound from the seven-month lows recorded in early May due to ongoing concerns about an increase in production. This rise in output is attributed to replanting initiatives, conducive weather conditions, and improved practices by smallholders. Additionally, inventories in April surged by 19.4% compared to March, reaching a six-month peak of 1.87 million tonnes. Without stronger demand or further policy measures, this stockpile could restrain any potential price increases.