FX.co ★ Palm Oil Drops for 4th Session

Malaysian palm oil futures saw a decline of nearly 1%, dipping below MYR 3,800 per tonne for the fourth consecutive session, driven by ongoing concerns about increasing production levels. According to the Malaysian Palm Oil Association, production grew by 3.5% month-on-month in the first 20 days of May. In terms of exports, cargo surveyors reported a rise in shipments, with an uptick of between 1.6% and 5.3% from April for the period of May 1–20. Concurrently, the European Union is preparing to introduce its "country benchmarking system" under the EU Deforestation Regulation (EUDR) by June 30. This framework will categorize countries as "low," "standard," or "high" risk, enforcing more rigorous due diligence for higher-risk sources in an effort to diminish the EU's contribution to global deforestation. The EUDR will pertain to seven key commodities, including palm oil. However, losses were curtailed as investors were reassured by President Trump's decision to set a deadline of July 9 for a trade agreement with the EU, stepping back from the imposition of a planned 50% tariff originally scheduled for June 1. Additionally, palm oil demand from India, the largest importer, is anticipated to recover after a period of subdued trading activity in recent weeks.