KUALA LUMPUR: Malaysian palm oil futures inched higher on Wednesday, rebounding after a two-day drop, supported by news that the US has exempted Indonesian palm oil from a 19 percent import tariff, though sluggish demand from markets outside China capped gains. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 19 ringgit, or 0.46 percent, to 4,489 ringgit (USD1,067.54) a metric ton at the close. It had lost 1.3 percent in the last two days.
CPO futures were seen trading higher as it gained support from news that the US has exempted Indonesian palm oil from a 19 percent import tariff, said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group. Washington has agreed in principle to exempt Indonesian exports of cocoa, palm oil and rubber from the 19 percent tariff that took effect on August 7, Indonesia’s top trade negotiator said on Tuesday. However, Bagani added that the slowdown in destination buying from markets other than China limited the rise. Dalian’s most-active soyoil contract fell 1.2 percent, while its palm oil contract shed 0.46 percent. Soyoil prices on the Chicago Board of Trade (CBOT) gained 0.37 percent.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices steadied, after falling in the previous session, as investors watched for fresh developments in the Ukraine war and weighed an industry report that showed a drop in US crude inventories. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
European Union soybean imports for the 2025-26 season that began in July reached 1.96 million metric tons by August 24, down 8 percent year-on-year, while palm oil imports declined 34 percent to 352,275 million tons, data from the European Commission showed. The ringgit, palm’s currency of trade, weakened 0.43 percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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