FX.co ★ Palm Oil Retreats to Start the Week

Malaysian palm oil futures experienced a decrease of approximately 1%, settling below MYR 4,280 per tonne. This decline followed a 2.5% rise in the previous session, as traders opted to secure gains after contracts reached a nearly four-month high. The market sentiment weakened further due to declining soyoil prices on both the Chicago Board of Trade and the Dalian exchange, in addition to a marginally stronger ringgit, which renders palm oil pricier for international buyers. In terms of exports, signals of diminishing demand became apparent with estimates from Intertek Testing Services suggesting that Malaysian palm oil product exports dropped by 3.5% during the period from July 1 to July 20, compared to the same timeframe last month. Furthermore, immediate demand concerns arose from substantial inventories in major importing nations like India and China. Nevertheless, the downtrend was somewhat mitigated as Malaysia increased its crude palm oil reference price for August, indicating recent market robustness. Consequently, the export duty was raised to 9%, up from the 8.5% rate in July.