Malaysian Palm Oil Slips From 21-Month High as September Exports Fall Up to 25.6%

Malaysian palm oil futures retreated from a 21-month high on Thursday and closed the session almost unchanged, weighed down by weak export shipments and expectations that inventories will build by the end of the month, oleoscope.com reported.

The pause interrupts a rally that had carried the benchmark contract to its highest level in almost two years. Traders are now weighing two opposing sets of signals: deteriorating physical demand for Malaysian cargoes on one side, and potential policy support from India and Indonesia on the other.

Exports slide in the first half of September

Cargo surveyors estimated that exports of Malaysian palm oil products between 1 and 15 September fell by 17.8% to 25.6% compared with the previous month. The spread reflects separate estimates published by different surveyors, but both ends of the range point to a double-digit contraction in shipments.

First-half shipment data is the earliest indicator the market uses to anticipate the monthly balance. A double-digit drop over the first two weeks is difficult to offset unless loadings accelerate sharply in the remainder of the month, which is why the export figures set the tone for the session despite supportive headlines elsewhere.

Stocks seen rising toward 3 million tonnes

“Palm oil market fundamentals remain under pressure because of weak exports in September and expectations that stocks at the end of the month could rise to around 3 million tonnes,” said Paramalingam Supramaniam, director of the Selangor-based brokerage Pelindung Bestari.

Inventories are the indicator the Malaysian market follows most closely. They determine how hard sellers have to compete for buyers, how spot premiums behave, and how aggressively producers price forward cargoes into the fourth quarter.

India, Indonesia and neighbouring markets

Supramaniam said the market drew some support from reports that India may lower import duties on vegetable oils and that Indonesia may raise its biodiesel blending mandate. A lower Indian duty would cut the landed cost for refiners in the country, while a higher Indonesian mandate would absorb more crude palm oil domestically and thin out exportable supply.

Related markets moved as follows:

• the most active soybean oil contract on the Dalian Commodity Exchange rose 0.4%;
• the exchange's palm oil contract added 0.18%;
• the ringgit weakened 0.31% against the US dollar, making the contract marginally cheaper for buyers holding foreign currency;
• global vegetable oil output in the 2025/26 season reached a record 221.8 million tonnes, according to data reported a day earlier.

Crude oil and technical levels

Oil prices fell after reports that Saudi Arabia had offered additional crude cargoes through Oman, easing concern over supply disruption. Quotations nevertheless stayed above $100 on fears of an escalation of the conflict in the Middle East, oleoscope.com reported. Weaker crude futures make palm oil a less attractive feedstock for biodiesel, because the margin on discretionary blending narrows as energy prices fall.

Reuters technical analyst Wang Tao said palm oil is attempting to break the 4,903 ringgit per tonne level and extend its advance toward 4,930 ringgit.