FX.co ★ Palm Oil on Track for Strong Weekly Gains

Malaysian palm oil futures have surged past MYR 4,450 per tonne, marking a continuation of gains for the third consecutive session and reaching a two-week high. This rally is supported by a weakening ringgit and a slight uptick in crude oil prices. As a result, the market is on track for its first weekly gain in three weeks, having risen approximately 1.9% thus far. The increase is underpinned by indications of stronger exports, with cargo surveyors reporting a 7.3% to 9.6% rise in Malaysian palm oil product shipments in September compared to the previous month. Additionally, predictions from the Malaysian Palm Oil Board of reduced year-end stock levels, estimated at 1.7 million tonnes, have invigorated market sentiment. This comes against the backdrop of seasonal production declines and heightened festive demand. Meanwhile, in India, the largest importer, edible oil imports are projected to reach a record 17.1 million tonnes by 2025/26. This is despite recent moves by authorities to increase base import prices for all vegetable oils, aligning them with higher global standards. However, the market's upward movement has been tempered by the continuing U.S. government shutdown, which is speculated to continue at least until next week, and the closure of the Dalian Exchange in China for the Golden Week holiday until October 8.