FX.co ★ Palm Oil Extends Gains Despite India Cancelling Orders

Malaysian palm oil prices remained above MYR 4,100 per tonne, marking a two-day upward trend. This increase is largely attributed to strength in comparable Dalian oils, particularly as the Chicago Board of Trade remained closed due to a public holiday. A solid export demand in June bolstered market sentiment, with data from cargo surveys revealing a shipment increase of 17.8% to 26.3% in the first half of the month compared to May. Nonetheless, in India, a leading consumer, refiners have reportedly canceled orders amounting to 65,000 metric tons of crude palm oil scheduled for delivery between July and September, a decision spurred by a significant price surge. Concurrently, both inventory levels and production have risen for a third consecutive month in May, sparking concerns about a possible oversupply in the near future. Additionally, geopolitical tensions have injected a degree of caution into the market, with investors wary of a possible escalation in the Israel-Iran conflict involving the U.S.