FX.co ★ Palm Oil Recovers on Strong Exports Despite Ample Supplies

Malaysian palm oil futures hovered near MYR 4,800 per tonne, rebounding from recent weakness in line with firmer edible oil prices on China’s Dalian exchange. Exports offered additional support, with cargo surveyors reporting a 43.2% to 58.3% month-on-month jump in Malaysian palm oil shipments during the first half of October. Sentiment was further lifted by festival-related demand from India, a key buyer.

On the policy front, Indonesia raised its October crude palm oil reference price by 3.44% to USD 1,042.15 per tonne, while higher crude oil prices enhanced palm oil’s appeal as a biodiesel feedstock. Supply-side concerns also underpinned the market: Indonesia’s proposed B50 biodiesel mandate is expected to boost domestic consumption, and El Niño-related weather risks threaten to curb production.

Nonetheless, upside remained limited by ample supply, as Malaysian palm oil inventories rose to a record 3.51 million tonnes in September amid seasonally strong production.