FX.co ★ Palm Oil Heads for First Weekly Loss in Four Weeks

Malaysian palm oil futures traded near MYR 4,850 per tonne, rebounding from recent declines as firmer rival edible oils on the Dalian and Chicago exchanges improved sentiment. Additional support came from higher crude oil prices and rising El Niño risks, which have heightened concerns over dryness and weaker output across Southeast Asia. Indonesia’s planned full implementation of its B50 biodiesel mandate on October 1 is also expected to strengthen domestic consumption and reduce exportable supplies.

Despite the recovery, futures were on track for their first weekly decline after three consecutive gains, down about 3.3% so far. The broader weakness reflected softer demand and abundant supply, with cargo surveyors reporting that palm oil exports for August 1–25 fell by 11.4%–20% from July. At the same time, inventories climbed to a five-month high in July, intensifying supply-side pressure.

Demand from India may face additional headwinds as refiners increasingly switch to cheaper soyoil. Imports of soyoil into India are projected to be strong in August, underscoring shifting preferences in the world’s largest palm oil buyer.