Palm oil falls due to weak soyoil but the expectation of lower stock limits losses
Malaysian palm futures closed lower for the second session in a row on Monday, due to a weaker soyoil. However, the expectation of falling inventories over the next few weeks helped limit the losses.
At the close, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery fell 12 ringgit or 0.27% to 4,384 Ringgit ($1,040.84) per metric ton. The contract dropped by 0.97% during the previous session.
David Ng is a proprietary trader with Kuala Lumpur's Iceberg X Sdn. Bhd. He said that the lower soybean oil price led to a decline in crude palm oil futures.
Ng said that the downward pressure on prices is also kept in check by expectations of lower stock levels in the next few weeks.
On October 10, the Malaysian palmoil board will release its September demand-and-supply data. On Tuesday, cargo surveyors will also release their September export estimates.
Dalian's palm oil contract, which is the most active contract, fell by 0.35%. Chicago Board of Trade soyoil prices were down by 0.9%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
Oil prices fell after Iraq's Kurdistan region resumed exports of crude oil via Turkey on the weekend. OPEC+ also plans to increase oil production in November.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency strengthened by 0.17% to the dollar. This made the commodity more costly for buyers who hold foreign currencies.
Dorab Mistry, an industry analyst, said that India's edible oils imports are expected to increase by 4.6% in 2025/26 to a new record of 17.1 million metric tonnes, driven by increased palm oil purchases from the world's biggest vegetable oil buyer.
Thomas Mielke, a leading industry analyst, said that tight supplies will cause palm oil and soybean oil prices to increase by $100 to 150 per metric tonne between January 2026 and June 2026. ($1 = 4.2120 ringgit)
(source: Reuters)
