FX.co ★ Palm Oil Muted Ahead of Monthly Data

Malaysian palm oil futures remained relatively stable, trading around MYR 4,485 per tonne on Tuesday, following two consecutive sessions of gains. The sentiment was affected by the downturn in competing vegetable oils on Chicago exchanges. Market participants exercised caution in anticipation of upcoming monthly reports from the Malaysian Palm Oil Board. Projections by Reuters suggest an increase in inventories for the sixth month in a row as production continues to surpass exports, despite indications of a demand recovery. Attention also turned toward China, a significant purchaser, where the forthcoming CPI and PPI data are expected to reveal ongoing deflationary pressures, thereby exacerbating concerns about slowing demand and trade tensions. Providing some support, cargo surveyors indicated that August shipments increased by 10.2% to 15.4% compared to July. In India, the leading buyer, palm oil imports surged by 16% to 993,000 tonnes, marking the highest level since July 2024. This rise is attributed to refiners building inventory in preparation for the mid-October festival season, with palm oil continuing to be significantly cheaper than soybean oil.