FX.co ★ Palm Oil Rises for 4th Session

Malaysian palm oil futures increased by over 1% to approximately MYR 4,450 per tonne, marking a rise for the fourth consecutive session and maintaining their highest level since early April. This uptrend was bolstered by the escalation in edible oil prices on the Dalian exchange and robust export figures, with cargo surveyors reporting that shipments surged over 23% in the first ten days of August. In Indonesia, the leading producer, Jakarta has confirmed intentions to increase the mandatory palm oil content in biodiesel to 50% in the upcoming year, up from the current 40%, although the rollout is unlikely to occur in January. Meanwhile, in India, refiners are anticipated to augment soyoil imports by 60% to set a new record in 2024/25, driven by cost advantages over palm oil, thereby reducing palm oil imports to a five-year low of 7.8 million tons. Nevertheless, short-term demand for palm oil might climb as buyers stock up in preparation for the mid-October Diwali festival. However, gains were limited by the appreciation of the ringgit and prospects for increased Malaysian production, with July output rising 7.1% to 1.81 million tons and stock levels reaching a near two-year peak of 2.11 million tons.