Palm oil falls over 1% on exports, rival oils weakness

JAKARTA: Malaysian palm oil futures fell more than 1% on Thursday, retreating from a 21-month high on expectations of rising September inventories, sluggish exports and weakness in rival vegetable oils.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 58 ringgit, or 1.16%, at 4,940 ringgit ($1,206.05) a metric ton at the close. Earlier in the day the contract hit its highest since December 2024.

Palm oil tracks rival edible oils as it competes for a share of the global vegetable oils market.

Dalian’s most-active soyoil contract fell 0.34%, while its palm oil contract lost 1.06%. Soyoil prices on the Chicago Board of Trade were down 1.02%.

“Palm oil fundamentals remain weighed down by weak September exports and expectations that end-month stocks could rise to around 3 million tons,” said Paramalingam Supramaniam, a director at Selangor-based brokerage Pelindung Bestari.

The market drew some support from speculation that India may cut import duties on vegetable oils and that Indonesia could raise its biodiesel blending mandate, he added.

Cargo surveyors estimated that exports of Malaysian palm oil products for September 1-15 fell between 17.8% and 25.6% from a month earlier.

Palm oil output in the major producing region of Kalimantan in Indonesia could fall by 12% to 15% in the fourth quarter, with plantations hit by prolonged dry weather and widespread fires.

The ringgit, palm’s currency of trade, weakened 0.33% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.

Oil prices eased on Thursday, extending losses as reports of additional Saudi crude cargoes through Oman eased supply concerns, though prices remained above $100 a barrel on fears the Middle East conflict could widen.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.