FX.co ★ Palm Oil Extends Losses, Still on Track for 3rd Monthly Gain

Malaysian palm oil futures declined nearly 1%, settling around MYR 4,400 per tonne. This downturn marks the second consecutive session of losses, hitting their lowest point in two weeks. The decline was influenced by a stronger ringgit and weaker rival edible oil prices in the Dalian and Chicago exchanges, creating a cautious mood in the market. This apprehension is heightened by anticipation surrounding the official August PMI figures from mainland China, a pivotal palm oil purchaser. Broader energy markets offered little encouragement, with crude oil poised for its first monthly decline in four months. Nevertheless, palm oil contracts are on track for their third successive monthly gain, climbing approximately 4% so far this month, driven by robust export activity. According to cargo surveyors, Malaysian shipments increased between 10.9% and 16.4% from August 1 to 25. Meanwhile, demand prospects in India, the leading importer, are looking up in anticipation of the Diwali festival in mid-October. Additionally, Indonesia, the largest palm oil producer, obtained a U.S. tariff exemption for commodities such as palm oil, which could significantly alter trade dynamics.