In W36 in the palm oil landscape, Malaysian palm oil futures experienced fluctuations driven by weaker rival oils on commodity exchanges, supply-demand data, and increasing production expectations. On Monday, September 4, the palm oil contract for Nov-23 delivery on the Bursa Malaysia Derivatives Exchange was down 1.36% to USD 856.62 per metric ton (mt), influenced by weaker rival oil prices on the Dalian and Zhengzhou Commodity Exchanges. However, on Wednesday, September 6, prices rebounded by 0.69% to USD 841.64/mt after two consecutive declines, driven by the recovery of competing vegetable oil prices. On Thursday, September 7, palm oil futures closed down 1.29% to USD 819.11/mt in anticipation of supply-demand data for Aug-23 from the Malaysian Palm Oil Board (MPOB) as well as losses in rival oil markets. The downward trend persisted into Friday, September 8, with palm oil futures falling by 0.84% to USD 812.66/mt, reaching their lowest level over the past three weeks. Moreover, the palm oil contract declined by 5.9% week-on-week (WoW) and was on track to decrease for the fifth consecutive session.
Malaysia’s palm oil inventories reached a six-month high of 1.89 million metric tons (mmt) by the end of Aug-23, primarily due to increased production and reduced exports. Production levels are estimated to have risen by 6.83% month-on-month (MoM) to 1.72 mmt, while palm oil exports decreased by 1.77% MoM to 1.33 mmt, according to MPOB. Additionally, Malaysia will maintain its crude palm oil export tax at 8% in Sept-23 and raise the reference price. Meanwhile, Indonesia has set the reference price for crude palm oil in the first half of Sept-23 at USD 805.2/mt, along with associated taxes and export fees of USD 33/mt and USD 85/mt, respectively.
Lastly, India's palm oil imports in Aug-23 rose to a nine-month high of 1.12 mmt, up from 1.09 mmt in Jul-23. India's palm oil imports are expected to jump 26% in the 2022/23 season ending October 31. The rise is attributed to recovering consumption and competitive prices, prompting refiners to boost their purchases, especially in preparation for upcoming festivals. Moreover, over the first ten months of the 2022/23 season, India imported a total of 14 mmt of edible oils, including 8.2 mmt of palm oil.
