FX.co ★ Palm Oil Retreats After Two-Day Rise

Malaysian palm oil prices have dropped below MYR 3,920 per tonne, reversing a two-session upward trend due to indications of increasing inventory levels. According to a Reuters report, it is expected that palm oil stocks rose for the third consecutive month in May, aided by a mild recovery in production. Meanwhile, declines in competing edible oils on both the Chicago and Dalian exchanges have also affected market sentiment. Prices are holding close to a seven-month low, and the Malaysian Palm Oil Council anticipates ongoing production growth through September, driven by replanting initiatives and favorable weather conditions. Nevertheless, this week has seen an approximately 1% rise in contracts, fueled by predictions of robust demand from India, the largest buyer, following a recent reduction in import duties. India's palm oil imports hit a six-month peak in May, as lower domestic stocks and competitive pricing compared to soyoil and sunflower oil spurred refiners to increase their purchases. Concurrently, Malaysia's export performance remained strong, with cargo surveyors estimating shipment growth in the range of 13.2% to 17.9% for the month of May.