FX.co ★ Palm Oil Extends Losses

Malaysian palm oil prices have dipped below MYR 3,850 per tonne, experiencing a decline for the second day in a row. This downturn is primarily attributed to discouraging monthly figures from the Malaysian Palm Oil Board (MPOB) that have continued to impact market sentiment. By the end of May, palm oil inventories had risen 6.65% from April, reaching 1.99 million metric tons—marking a third consecutive monthly rise and the highest level observed since September 2024. Concurrently, crude palm oil production increased by 5.05% to 1.77 million tons, also registering a rise for the third consecutive month. Futures prices are hovering around a seven-month low, influenced by weakened consumption, especially from China, and expectations of ongoing production growth through September. Nevertheless, the decline has been somewhat mitigated by strong export figures, with May shipments surging by 25.6% to 1.39 million tons, the highest since November. In India, the largest importer, demand is predicted to rebound in the coming months following a recent reduction in import duties. On a global scale, the advancement in U.S.-China trade negotiations has generated optimism for the alleviation of retaliatory tariffs, awaiting final endorsement from Presidents Trump and Xi Jinping.