W37: Palm Oil Update

Publicado Sep 22, 2023
W37: Palm Oil Update

In W37 in the palm oil landscape, on Monday, September 11, the palm oil contract for Nov-23 delivery on the Bursa Malaysia Derivatives Exchange was down by 3.03% to USD 790.89 per metric ton (mt) due to increased inventories and declining exports in Malaysia, the world's second-largest palm oil producer. The downward trend continued on Tuesday, September 12, with palm oil futures dropping by 0.67% to USD 785.35/mt for the seventh consecutive session, influenced by weakness in rival oilseeds. However, on Wednesday, September 13, Malaysian palm oil futures rebounded by 0.16% to USD 785.56/mt, ending the seven-session losing streak, driven by a recovery in Chicago soybean oil. The upward momentum persisted as palm oil futures rose 1.23% to USD 803.24/mt on September 14 and 0.64% to USD 806.01/mt on September 15. Despite these recent gains, the contract experienced a 1.17% decline for the week, extending a 5.2% fall from the previous week.

As of September 8, 2023, European Union (EU) palm oil imports amounted to 634,515 mt, marking a decrease from the 736,716 mt imported during the same period last year. Similarly, Malaysia's palm oil product exports in the first ten days of Sept-23 dropped by 11.2% month-on-month (MoM) to 350,823 mt. Meanwhile, Malaysia's palm oil inventory surged by 22.5% MoM to 2.12 million metric tons (mmt) at the end of Aug-23 due to increased production levels and a slowdown in palm oil exports. Notably, crude palm oil production saw an 8.9% MoM increase in Aug-23, reaching 1.75 mmt, while palm oil exports decreased to 1.22 mmt during the same period.

China's imports of Malaysian palm oil are set to double from the current 250 thousand mt per year to 500 thousand mt annually. This expansion follows the signing of a memorandum of understanding (MOU) between the two countries. The MOU exchange was witnessed by Malaysia's Prime Minister, Datuk Seri Anwar Ibrahim, and several other ministers during his one-day working visit to Nanning, China.

Lastly, India's palm oil imports for the 2022/23 period are projected to surge by 26% to reach a record high, ending on October 31. This increase is attributed to recovering consumption and competitive prices, leading mills to ramp up their purchases. In Aug-23, India imported 327,815 mt of palm oil from Malaysia, reflecting an approximately 8.5% month-on-month (MoM) increase. These shipments from Malaysia consisted of 287,018 mt of crude palm oil (CPO), 24,000 mt of refined, bleached, and deodorized (RBD) palm oil, and 16,797 mt of crude palm kernel oil, contributing to a total palm oil import volume of over 1.12 mmt for the month.

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