FX.co ★ Palm Oil Recovers But Faces Monthly Loss on Supply Pressure

Malaysian palm oil futures firmed, trading near MYR 4,650 per tonne after a recent pullback that pushed prices to an eight-week low. The market drew support from bargain hunting and stronger Dalian edible oil prices, while signs of improved economic activity in China in September — a key buyer of palm oil — buoyed sentiment amid easing weather-related disruptions and renewed expectations of policy stimulus.

Rising global crude oil prices, poised for a third consecutive monthly gain, further underpinned the market by enhancing the relative attractiveness of palm oil as a biodiesel feedstock. In India, import duty reductions on vegetable oils ahead of the festive season bolstered demand prospects.

Despite these supportive factors, Malaysian palm oil futures are on track for their first monthly decline in three months, down about 5% amid sluggish exports. Cargo surveyor data showed that shipments for Sept. 1–25 fell by 15.1%–24.3% from August levels. At the same time, inventories climbed to an eight-month high in August and are expected to surpass 3 million tonnes in September. Production jumped 20.84% in the first 25 days of September, highlighting persistent supply pressure.