Malaysian Palm Oil Futures Slip Amid Rising Stockpiles and Weak Export Demand

Malaysian palm oil futures ended lower on Friday due to expectations of rising stockpiles and sluggish export demand. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange fell by 8 ringgit, or 0.17%, at 4,678 ringgit (USD1,144.32) a metric ton.

Anilkumar Bagani, commodity research head at Sunvin Group, said that crude palm oil futures traded lower amid estimates of rising palm oil stocks in Malaysia as well as 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, with production growth 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 palm oil export estimates for the same period.

Oil prices edged higher due to concerns surrounding the reopening of the Strait of Hormuz and potential Iranian bans and fines on vessels deemed hostile or in violation of proposed rules. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock, causing Dalian’s most-active soyoil contract to rise 0.27%, while its palm oil contract shed 0.3%.