FX.co ★ Palm Oil Set for Second Weekly Drop as Supply, Weak Exports Weigh

Malaysian palm oil futures extended their decline, trading below MYR 4,550 per tonne and touching their lowest level since mid-July. For the week, prices are on track for a second consecutive weekly loss, down about 3.1% so far.

Sentiment remained under pressure from rising inventories, with August stocks climbing to an eight-month high and projected to exceed 3 million tonnes in September. Weak demand added to the bearish tone, as cargo surveyors estimated a month-on-month decline of 17.1% to 28.8% in September palm oil exports.

Trading cues were also limited by the closure of China’s Dalian commodity exchanges for the Golden Week holiday. However, the downside was partially contained by expectations that palm oil imports by top buyer India will remain steady in the 2026/27 marketing year following a cut in import duties. Additional reductions in edible oil duties ahead of the festive season could further underpin near-term demand.

Elevated crude oil prices provided further support amid ongoing geopolitical uncertainty in the Middle East, enhancing the attractiveness of palm oil as a feedstock for biodiesel.