In W29 in the palm oil landscape, palm oil futures on the Bursa Malaysia Derivatives Exchange experienced price increases throughout the week. On Monday, July 17, the October palm oil futures rose 0.87% to USD 866.87/metric ton (mt), driven by a 16.7% month-on-month (MoM) increase in exports of Malaysian palm oil products for July 1 to 15, as well as firmer ringgit and stable vegetable oil prices on the Dalian exchange. On Thursday, July 20, the October palm oil futures rose sharply by 2.62% to USD 879.43/mt, influenced by competitive cooking oil prices and strong demand following the holiday. By Friday, July 21, the futures continued to climb by 0.47% to USD 893.21/mt, marking a fourth week of gains due to robust July export data and supply concerns from the Black Sea. Overall, in July, Malaysian palm oil prices surged due to Indonesia's export restrictions and concerns about El Niño.
Malaysia's palm oil exports from July 1 to 20 this year increased by 19% MoM to 754,214 mt. Additionally, data from Malaysian Palm Oil Board showed that Malaysia's palm oil inventories in Jun23 rose 1.9% MoM to 1.72 million metric tons (mmt), a four-month high, lower than the forecasted 10.5% increase. Crude palm oil production in June decreased by 4.6% MoM to 1.45 mmt, while exports rose by 8.6% to 1.17 mmt. Notably, imports surged by 67%, partly due to the lower price of palm oil from Indonesia. Malaysia has maintained its August export tax for crude palm oil at 8% and raised its reference price, according to the MPOB.
In the European Union (EU), palm oil imports decreased by 19% year-on-year (YoY) or 934 thousand mt to 4 mmt in the 2022/23 MY. The decline was most notable in the Netherlands, Italy, and Belgium. Italy's imports dropped by 38% to 803 thousand mt, while Belgium's imports fell by 42% to 100 thousand mt. However, Germany experienced an increase in palm oil imports. The decline in imports is mainly attributed to the decline in using palm oil as a raw material for the production of biodiesel or hydrogenated vegetable oil (HVO).
India’s June palm oil imports surged by 56% to a three-month high of 683,133 mt, compared to 439,173 mt in May, as prices fell to their lowest in 28 months. The increase was driven by falling prices, which reached their lowest point in 28 months. Out of the total imports, India purchased 155,058 mt of palm oil from Malaysia, consisting of 139,932 mt of crude palm oil (CPO) and 15,126 mt of RBD palm oil. This rebound in buying from India, the world's largest vegetable oil importer, is expected to support Malaysian palm oil futures and help Indonesia and Malaysia to reduce their inventories. Price sensitivity and quick shipping times make palm oil a preferred choice for Asian buyers.