Lang
The Malaysian Palm Oil Board expects the country's palm oil production to rise from 19.3 million tonnes in 2024 to 19.5 million tonnes in 2025, supported by an improved labour supply. Malaysia, the world's second-largest palm oil producer, is also set to increase its palm oil exports to 17 million tonnes in 2025.
Malaysia had earlier raised the reference price for crude palm oil for August to US$910.81 a tonne, while lifting the export duty to 9%.
September palm oil futures on Bursa Malaysia Derivatives fell 1.3% to 4,273 ringgit (equivalent to US$1,013 a tonne) on Friday, down 1% for the week, weighed down by weaker July exports and expectations of higher production that would lead to a build-up in stocks. According to cargo surveyors, Malaysian palm oil exports fell by 3.5–7.3% in the 1–20 July period compared with the same period in June.
By contrast, December soybean oil futures on the Chicago Board of Trade rose 0.7% to US$1,233 a tonne (+6.3% month-on-month), driven by strong domestic demand from biofuel producers, and were unmoved by improved US soybean crop prospects or uncertainty over exports to China, which could sharply boost domestic supply in September and October.
Meanwhile, Brazilian soybean oil prices for July delivery held steady at US$1,135 a tonne (FOB), keeping global soybean oil prices below those of sunflower oil, which is limiting palm oil's price growth.
The 8% monthly rise in palm oil prices and the 6.3% increase in soybean oil prices have in turn supported sunflower oil prices.
Sunflower oil prices delivered to India rose by US$15–20 a tonne over the week to reach US$1,220–1,225 a tonne (CIF Mumbai), while prices in Ukraine climbed by US$25–30 a tonne to US$1,140–1,145 a tonne (delivered Black Sea ports). Low raw material stocks in Ukraine and expectations of a smaller crop in the south due to drought are keeping prices elevated.
The Russian government has also suspended export duties on sunflower oil and meal until 31 August 2025, a move that will allow for higher processing volumes and better profit margins, and in turn boost exports by Russian producers. Russian sunflower oil prices for July–August delivery rose to US$1,140–1,145 a tonne FOB.
Rain-delayed rapeseed harvesting is currently supporting vegetable oil prices, but August is expected to bring higher supply across all oils, which will put downward pressure on prices.
Source: Al Mal Forum