FX.co ★ Palm Oil Retreats on Profit-Taking Ahead of Key Data

Malaysian palm oil futures experienced a decline of approximately 1%, settling below MYR 4,250 per tonne. This drop came as traders opted to secure profits following a 2.5% increase in the previous trading session. Caution prevailed in the market ahead of significant economic data releases from China, including trade, CPI, and PPI figures for July, given China's status as a major purchaser of palm oil. Market participants also looked forward to next week's supply-and-demand report from the Malaysian Palm Oil Board. Preliminary estimates from Reuters suggested that inventories grew for the fifth consecutive month in July, reaching nearly a two-year high due to robust production and tepid domestic consumption. While exports were projected to rise by 3.2% to 1.3 million tonnes, they faced limitations due to intense competition from Indonesia, the leading producer, which offered substantial discounts in anticipation of upcoming tariff increases. Meanwhile, in India, the world's largest palm oil importer, July saw a 10% decrease in imports, totaling 858,000 tonnes, down from June's peak over the past 11 months, as a result of contract cancellations. The downward pressure was somewhat alleviated by statements from U.S. President Trump, indicating that the trade negotiations between Washington and Beijing were "very close" to extending their truce beyond the current deadline of August 12.