Palm slips for fourth session on stockpile fears, weak demand

KUALA LUMPUR: Malaysian palm oil futures slipped more than 1% on Wednesday, down for the fourth straight session, on expectations of rising inventories and weak demand.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange slid 71 ringgit, or 1.48%, to 4,739 ringgit ($1,163.80) a metric ton by the midday break.

The market is well aware that end-stocks will likely rise to 3 million metric tons, or slightly higher by September-end, driven by a double-digit increase in production, particularly in the state of Sabah, said Paramalingam Supramaniam, a director at Selangor-based brokerage Pelindung Bestari.

“Demand also remains sluggish and the market cannot escape the influence from both of these overarching variables,” he added.

Cargo surveyors estimated that exports of Malaysian palm oil products for September 1 to 20 fell between 12.8% and 24.7% from a month earlier. Dalian’s most-active soyoil contract fell 0.61%, while its palm oil contract shed 1.79%. Soyoil prices on the Chicago Board of Trade were down 0.97%.

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

Oil prices drifted lower as Saudi Arabia began restoring crude supply on a critical pipeline to the Red Sea and on hopes for a diplomatic solution to the US-Iran war through talks at the UN in New York. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

European Union soybean imports for the 2026/27 season that began in July had reached 2.67 million tons by September 20, down 14% from a year earlier, while palm oil imports fell 26% to 0.56 million tons, European Commission data showed.