FX.co ★ Palm Oil Rebounds on Firmer Energy Prices, Export Strength

Malaysian palm oil futures rose nearly 1% to above MYR 4,550 per tonne, rebounding from recent losses as a weaker ringgit and strength in edible oil markets in Dalian and Chicago improved sentiment. The rally in crude oil prices, driven by concerns over potential disruptions to energy shipments through the Strait of Hormuz, provided additional support.

Export performance also improved, with cargo surveyors reporting that shipments for July 1–10 were up by 1.6%–5.1% compared with the same period in June. In Indonesia, the world’s largest supplier, the planned increase in the biodiesel blending mandate to B50 is expected to further bolster domestic consumption.

However, gains were limited by news that EU imports of palm oil derivatives will fall under the bloc’s anti-deforestation regulations from December 2027. On the supply side, Malaysian inventories for June rose 4.8% month-on-month, as production increased 8.1% due to seasonal factors. In India, imports slipped to a 14‑month low in June, weighed down by weak demand and shrinking discounts relative to competing vegetable oils. Traders also remained cautious ahead of China’s Q2 GDP release, despite robust June trade data from the key importing country.