Malaysian palm oil futures eased after their recent rally, slipping back below MYR 4,700 per tonne, pressured by weaker edible oil prices on China’s Dalian exchange and a decline in crude oil, which reduced palm oil’s attractiveness as a biodiesel feedstock. Market sentiment was further dampened by renewed concerns over record-high stockpiles, with inventories rising to 3.51 million tonnes in September at the peak of the seasonal production cycle, according to data from the Malaysian Palm Oil Board (MPOB).
At the same time, optimism over demand was limited by the nature of China’s recent economic strength: its robust September trade surplus and import growth have been driven largely by strong industrial activity and global technology demand, rather than a broad-based rebound in domestic consumption.
However, the downside was partly contained by signs of firmer export demand. Cargo surveyors estimated that palm oil shipments increased by 33.5%–37.7% in the first 10 days of October compared with the same period in September. Expectations of continued festive-season buying from leading importer India also helped to underpin prices.