FX.co ★ Palm Oil Extends Rally to 5-1/2-Month High

Malaysian palm oil futures surged by 1.7%, surpassing MYR 4,500 per tonne, marking a significant rise for the second consecutive session and reaching their highest level in five and a half months. This upward trend was supported by a depreciating ringgit and increased palm olein prices on the Dalian exchange. Additionally, there were positive indicators of strong export performance, as cargo surveyors reported a shipment increase ranging from 6.5% to 21.3% compared to the previous month during the first 15 days of August. In India, a key consumer, demand is projected to rebound in August and September as buyers prepare for the mid-October Diwali festival by increasing their stocks. This follows a 10.5% drop in July imports after a substantial rise in import duties for crude palm oil and refined palm olein from 8.25% to 19.25%. In China, another major market, the government pledged targeted economic support in response to weak activity data for July. However, the potential for further price increases was restrained by forecasts of higher Malaysian production, with industry figures revealing July's output rose by 7.1% to 1.81 million tons and stock levels nearing a two-year high at 2.11 million tons.