FX.co ★ Palm Oil Retreats After Two-Day Rise

Malaysian palm oil futures declined by over 1%, descending below MYR 4,180 per tonne, thus ending a two-day upward trend. This drop was primarily due to traders securing profits after prices had reached nearly a three-month peak. Additionally, market sentiment weakened owing to mounting concerns over the impending U.S. tariffs before the August 12 deadline, along with ongoing uncertainties related to weather conditions. Industry data revealed that June inventories climbed by 2.41%, reaching an 18-month high of 2.03 million tonnes, which added further downward pressure on prices. In China, a key consumer, Q2 GDP growth decelerated to its slowest rate in three quarters, with economic momentum anticipated to weaken further in the second half of the year amid increasing challenges. Nonetheless, expectations of stronger exports in July provided some support, as palm oil regained its price competitiveness relative to rival edible oils. In India, the world's largest importer of palm oil, purchases surged to an 11-month high in June, as buyers replenished inventories due to favorable pricing.