Malaysian palm oil futures have dipped below MYR 4,500 per tonne, marking a decline for the second consecutive session, primarily due to weakness in Chicago soyoil prices. Contributing further to this decline, July saw a rise in palm oil inventories to 2.11 million tonnes, the highest level observed in nearly two years, with production also increasing by 7.1% to reach 1.81 million tonnes, as per data released by the Malaysian Palm Oil Board.
Nonetheless, certain supportive factors helped to mitigate the downside. The depreciation of the ringgit has enhanced the appeal of palm oil to international buyers. Concurrently, Indonesia's B40 biodiesel mandate has continued to absorb over one million tonnes of palm oil on a monthly basis since February, effectively curbing stock accumulation in the world's leading producer.
On the export side, estimates from cargo surveyors indicate that Malaysian palm oil product shipments from August 1 to 25 saw an increase of between 10.9% and 16.4% when compared to the corresponding period in the previous month. In India, the largest global consumer, there is an anticipated rise in demand fueled by upcoming Diwali festivals, which are expected to drive festive-related purchases in mid-October.
