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Increases in palm oil production and inventories have not yet led to lower prices, but could do so in Q2

Published May 25, 2024

Tridge summary

Malaysia's palm oil futures remained stable despite a decrease in oil prices and anticipated rise in inventories due to increased production and reduced exports. The rise in soybean and sunflower oil prices could potentially boost palm oil exports, especially with decreased stocks in China and India. However, analysts predict that palm oil prices could fall due to higher production and lower exports in Malaysia, and a 12% reduction in exports by Indonesia. Meanwhile, the US is experiencing an oversupply due to a significant increase in oil inventories, caused by increased processing volumes, and a forecasted rise in global oilseed production.
Disclaimer: The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Palm oil futures in Malaysia traded flat for the week, despite a drop in oil prices and data that production increases and export cuts will lead to higher inventories. Yesterday, July palm oil futures on Bursa rose 0.6% to 3,892 ringgit/t or $828/t (+2.3% on the week) amid rising soybean and sunflower oil prices, which could lead to revitalization of palm oil exports, especially in view of the reduction of stocks in China and India. According to the Palm Oil Council (MROS), its stocks in Malaysia rose by 1.8% to 1.74 million tonnes in April for the first time in 6 months, as production increased by 8.6% in the January-April period and exports by only 2 %. For May 1-20, production increased compared to the corresponding period in April, and exports, according to surveyors, decreased by 8.3-9.6%. Analysts at Reuters believe palm oil prices could fall to RM3,812-3,832/t and even more amid lower exports as Malaysia's oil production continues to increase, especially in the ...
Source: Graintrade
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