Malaysian palm oil futures slipped about 1.3% to MYR 4,900 per tonne, extending their decline to a one-week low. Market sentiment weakened after Malaysian Palm Oil Board data showed inventories rising 7.48% month-on-month in August to an eight-month high of 2.82 million tonnes. At the same time, exports fell 7.5% to 1.29 million tonnes, while production increased 1.39% to 1.82 million tonnes, reinforcing concerns about ample supply.
Risk appetite was further dampened by softer edible oil prices in Dalian and Chicago, as well as a stronger ringgit. In India, heavy purchases of edible oils have congested key ports, delaying vessel unloading by up to 10 days amid overflowing storage tanks, a situation that could curb near-term import demand.
However, the downside was limited by elevated crude oil prices, with Brent surpassing US$100 per barrel on renewed Middle East tensions, enhancing palm oil’s attractiveness as a biodiesel feedstock. Additionally, dry weather across Southeast Asia has raised concerns over future yields, following outbreaks of fires and haze in Borneo and Sumatra.
