FX.co ★ Palm Oil Stays Below MYR 4,700 on Weak Demand

Malaysian palm oil futures extended their decline, trading below MYR 4,700 per tonne and hovering near a six-week low, pressured by weakness in rival edible oils on both the Dalian and Chicago exchanges. Bearish sentiment was further weighed down by sluggish exports, with cargo surveyors estimating that Malaysian palm oil shipments in the first 25 days of September fell by 15.1%–24.3% compared with the same period in August. Expectations of rising domestic inventories and muted Indian demand in September added to the downward pressure, although India’s recent import duty cuts could lend support to purchases ahead of the festive season.

Industry officials noted that the anticipated impact of El Niño on palm oil output has yet to materialise. Even so, the downside in prices was partly limited by firmer crude oil markets after President Trump rejected Iran’s conditional proposal to reopen the Strait of Hormuz. In addition, forecasts of a potentially shorter-than-normal wet season in Indonesia from November pose a further risk to crop conditions.