FX.co ★ Palm Oil Holds Near MYR 4,900 on Supply Concerns

Malaysian palm oil futures inched higher, trading close to MYR 4,900 per tonne after recent declines, supported by stronger soyoil prices on China’s Dalian exchange and expectations of tighter supplies. Indonesia’s B50 biodiesel mandate is expected to channel more palm oil toward domestic consumption, while El Niño-related weather risks could constrain production in both Indonesia and Malaysia. Demand prospects also brightened, with palm oil imports by top buyer India rising 7% month-on-month to 782,761 tonnes in August, the highest level since February, as refiners rebuilt inventories ahead of the festival season. Separately, Malaysia increased its October crude palm oil reference price but left the export duty unchanged at 10%. Upside momentum was capped, however, by a stronger ringgit and softer crude oil prices, as renewed diplomatic efforts aimed at easing tensions in the Middle East weighed on the energy complex. Market attention is now focused on a potential cut to India’s palm oil import tariffs, with an official decision expected soon that could significantly influence demand for Malaysian palm oil.