Malaysian Palm Oil Futures Slide Amid Rising Stockpiles and Weaker Demand

Malaysian palm oil futures closed lower on Friday, pressured by expectations of rising stockpiles and sluggish export demand. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange shed 0.17% to 4,678 ringgit (USD1,144.32) per metric ton.

Anilkumar Bagani, commodity research head at Sunvin Group, attributed the decline in crude palm oil futures to estimates of rising palm oil stocks in Malaysia and weak forward sales of shipments.

A Reuters survey showed that Malaysia's palm oil inventories are expected to rise to a five-month high in July, outpacing robust demand. The Malaysian Palm Oil Board will release its July demand and supply data on August 10, while cargo surveyors will publish their estimates for the August 1-10 period.

Oil prices rose due to concerns surrounding the Strait of Hormuz and potential Iranian bans and fines on vessels deemed hostile or in violation of proposed rules. As a result, palm oil became more attractive as a biodiesel feedstock with stronger crude oil futures.