FX.co ★ Palm Oil Extends Gains

Malaysian palm oil futures experienced a slight uptick, reaching above MYR 4,260 per tonne, following minimal gains from the previous session. This increase was supported by a weakening ringgit and strengthened rival Dalian oils. Demand from major buyer India is anticipated to remain robust as the Diwali festival approaches in mid-October. Additionally, Indonesia, the leading palm oil producer, forecasts that its exports to India will surpass 5 million tonnes this year, an increase from 4.8 million tonnes in 2024. However, further advancement in prices was tempered by caution resulting from the recent U.S.-China trade discussions, which ended without significant progress. President Trump is expected to make a decisive announcement regarding tariffs. In China, both official and private PMI data for July are scheduled to be released soon, heightening concerns about deflation risks and the impact of global trade barriers. Regarding exports, there was a decline in Malaysian palm oil shipments between July 1 and 25, with cargo surveyors reporting a reduction of 9.2% to 15.2% compared to June. Production is anticipated to increase in the second half of the year, aided by improved labor conditions.