FX.co ★ Palm Oil Inches Higher

Malaysian palm oil futures saw an uptick, reaching approximately MYR 3,930 per tonne after enduring five consecutive days of decline. The market sentiment improved following U.S. President Trump's indication of potential relief in tariffs on Chinese goods. Additionally, indicators of increasing demand provided support to the market; cargo surveyors reported that exports of palm oil rose by 13.8% to 14.8% from April 1 to April 25. In parallel, expectations are building that China’s palm oil imports may increase during May and June, in preparation for the summer demand. However, the potential for further gains faced constraints due to reports that palm oil imports by India's largest buyer decreased by 24% in April compared to March, remaining below average for the fifth consecutive month. This decline is attributed to palm oil's premium over soyoil, which has driven a shift to the more affordable alternative. Growing cautiousness also surrounds the upcoming monthly data release from the Malaysian Palm Oil Council due next week. Reuters predicted that inventories are likely to have risen for a second consecutive month in April, with production surging by 16.9% from March, reaching the highest level since November. In other developments, Malaysia indicated that the recent rally of the ringgit is manageable and is not significantly impacting export performance.