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Malaysian palm oil futures extended their recent downtrend, hovering below MYR 4,650 per tonne and touching an eight-week low. The slide was driven by softer edible oil prices on China's Dalian market and sluggish export demand that weighed heavily on trader sentiment.
Cargo surveyors reported that Malaysian palm oil shipments fell between 15.1% and 24.3% during the first 25 days of September, compared with the same period in August. At the same time, expectations of seasonally higher output raised concerns that end-month stocks could climb past the 3 million tonne mark.
Industry estimates point to a sharp rebound in production, with output up 20.84% in the first 25 days of September from August. Despite this bearish supply outlook, losses were capped by firmer crude oil prices, supported by persistent uncertainty over US-Iran negotiations, which in turn sustained demand for palm oil as a biodiesel feedstock.
The regional picture also turned softer, as Indonesian palm oil exports fell 9.87% year-on-year to 3.19 million tonnes in July, according to a local palm oil association, adding another layer of concern over demand across the region.
Market participants are now turning their attention to China's September PMI data for fresh clues on industrial activity and broader commodity appetite.
Source: TradingView