FX.co ★ Palm Oil Extends Gains to Start the Week

Malaysian palm oil prices currently stand near MYR 3,950 per tonne, marking a second day of increases. This upswing is supported by higher prices on the Dalian exchange and a more favorable exchange rate for the ringgit. Positive sentiment is also influenced by signs of easing trade tensions between the U.S. and China, with negotiations between these two economic giants resuming today, thereby boosting broader market confidence, including that of palm oil. Additionally, expectations of increased demand from India, the leading importer, have risen following a recent reduction in import duties. In May, India's palm oil imports reached the highest level in six months, as refiners took advantage of competitive pricing relative to soyoil and sunflower oil, alongside declining stock levels. However, despite these upward trends, palm oil prices have struggled to overcome seven-month lows due to ongoing worries about rising stockpiles. Reuters estimates suggest that Malaysian palm oil inventories likely increased for the third consecutive month in May. Moreover, pressure on prices is compounded by projections from the Malaysian Palm Oil Council, which foresee continued production growth through September, fueled by replanting efforts and favorable weather conditions. Market participants are now keenly waiting for the release of key monthly data from the Malaysian Palm Oil Board, scheduled for Tuesday.