FX.co ★ Palm Oil Rebounds as Bargain Hunting Offsets Weak Exports

Malaysian palm oil futures rebounded, trading near MYR 4,350 per tonne and ending a recent losing streak as buyers stepped in after prices fell to their lowest level since early March. The upturn was further supported by gains in rival edible oils and firmer crude oil prices, which helped improve overall risk sentiment.

On the supply side, seasonal production is expected to decline as palm trees enter their low-yield phase from November, with potential El Niño effects adding further downside risk to output. At the same time, Indonesia’s push to raise biodiesel blending mandates is anticipated to absorb significant volumes of palm oil, underpinning prices over the medium to long term.

However, upside momentum was tempered by signs of softening demand. Intertek Testing Services reported that palm oil exports fell 1.9% month-on-month during the November 1–10 period, easing back after strong shipments in October. In addition, monthly data from the Malaysian Palm Oil Board showed inventories rising to a new record of 3.62 million tonnes in October, the seventh consecutive monthly increase, while production expanded for a fifth straight month.