FX.co ★ Palm Oil Holds Gains Ahead of Monthly Data

Malaysian palm oil futures traded above MYR 4,950 per tonne, extending recent gains as stronger edible oil prices on the Dalian exchange and higher crude oil prices improved sentiment, amid mounting worries over prolonged supply disruptions from the Middle East. Bullish momentum was further supported by rising El Niño risks, with increasingly dry conditions threatening output across Southeast Asia. Production in top grower Indonesia is now projected to decline 2.9% year-on-year in 2027.

Demand prospects also brightened in India, where refiners ramped up purchases ahead of the festival season, importing record volumes of soyoil and the largest quantity of palm oil in six months. Still, upside in prices was limited by a weaker ringgit and the absence of guidance from Chicago markets, which were closed for a public holiday.

On the supply side, ample availability continued to weigh on sentiment. Malaysian palm oil inventories rose to a five-month high in July, while export weakness added further pressure: cargo surveyors reported that August shipments fell between 6.5% and 14.9% from July. Traders are now awaiting the latest monthly data from the Malaysian Palm Oil Board, due later this week.