FX.co ★ Palm Oil Rallies to 7-Week High

Malaysian palm oil futures experienced a significant uptick, rising approximately 2% to surpass 4,500 per tonne. This marks a seven-week high, building upon gains from the previous session. The increase is attributed to firmer soyoil prices on the Chicago exchange, an uptick in crude oil prices, and a depreciation of the ringgit. Additionally, rising exports have encouraged positive market sentiment, as cargo surveyors observed a 7.3–9.6% increase in shipments compared to August. According to Reuters, Malaysian stockpiles likely decreased by 2.5%, reaching 2.15 million tons last month. Meanwhile, Indonesia, the leading palm oil producer, is advancing its initiative to mandate B50 biodiesel by 2026 and is contemplating the introduction of 10% bioethanol in gasoline to slash emissions and cut down on fuel imports. China, a major purchaser, is expected to re-engage in market activities shortly. However, the gains are tempered by market caution in anticipation of September's monthly data and declining orders from India, the world’s largest consumer. Indian orders fell by 15.9% to 833,000 tons last month and are projected to further decline to 600,000 tons in October with the culmination of festive buying. The potential for an extended U.S. government shutdown also poses a risk to the markets.