FX.co ★ Palm Oil Slumps to 7-1/2-Month Low

Malaysian palm oil futures experienced a decline of over 2.0%, falling below MYR 3,800 per tonne. This marks the fifth consecutive session of losses and represents the lowest point in seven and a half months. The downturn is largely attributed to a significant drop in crude oil prices and concerns about increasing supply. According to a Reuters forecast, stock levels likely increased for the second consecutive month in April, as the industry enters its peak production period. Output is expected to surge by 16.9% in April compared to March, reaching the highest level since November and marking two months of continued growth. Nevertheless, signs of easing tensions in the U.S.-China trade dispute provided some limitation on the losses. The United States has indicated a potential willingness to reduce tariffs, while China is open to reengaging in trade discussions. On the export side, shipments from April 1–25 are anticipated to rise by 13.8% to 14.8% compared to the previous month, according to cargo surveyors. Additionally, the Malaysian Palm Oil Council has suggested that Chinese importers might increase purchases in May and June to replenish stocks in preparation for heightened summer demand. Similarly, India's primary position as a top buyer could lead to a renewal of inventories, as price differences with soybean oil narrow.