FX.co ★ Palm Oil Hovers Above MYR 4,050

Malaysian palm oil prices have exceeded MYR 4,050 per tonne, showing a partial recovery after previous losses. This rebound is attributed to the strength observed in competing soyoil markets, particularly on the Dalian and Chicago exchanges. Market sentiment was further bolstered by indications of robust export activities in June. According to cargo surveyors, Malaysian palm oil exports increased significantly, rising between 17.8% and 26.3% in the first half of the month compared to the same timeframe in May. In India, the top consumer of palm oil, imports dramatically surged by 84% in May from April, reaching a six-month peak. This rise followed a period of reduced imports from January to April, which had led to a depletion of domestic palm oil inventories, bringing them down to 1.33 million tons as of June 1, marking the lowest level since July 2020. Concurrently, crude oil prices approached their highest point since February amid heightened speculation about a potential U.S. involvement alongside Israel in action against Iran. Nevertheless, the upward momentum in palm oil prices was curtailed by expectations of increasing stockpiles and production, both of which rose for the third month in a row in May.