FX.co ★ Palm Oil Stabilizes on Bargain Hunting, Firm Exports

Malaysian palm oil futures stabilized around MYR 4,350 per tonne, recovering from a 2% drop in the previous session which marked a six-week low. This rebound is attributed to bargain hunting, a depreciating ringgit, and stronger crude oil prices due to tightening global supply. Market sentiment was further bolstered by news that the European Union will delay enforcing its anti-deforestation law for another year, thereby postponing restrictions on palm oil imports. On the demand front, exports from September 1 to 20 are projected to have increased by 8.3–8.7% compared to August, with Indian purchases expected to remain robust ahead of the October festive season. Nonetheless, the potential for further gains seems constrained as Malaysian production is anticipated to reach its peak between September and October, aided by favorable weather conditions, and end-August inventories have risen by 4.2% month-on-month to 2.2 million tonnes.