Palm oil falls on concerns over record Malaysian stocks

Malaysian palm oil futures declined for a second consecutive session amid concerns over rising inventories. The benchmark December contract on Bursa Malaysia Derivatives fell 0.79% to 4,524 ringgit ($1,107.2) per ton.

The market remains under pressure from high palm oil stocks, particularly in nearby contracts. According to a Reuters survey, Malaysia’s inventories could reach an all-time high in September, surpassing the previous record set in December 2018.

The buildup in stocks has been driven by a sharp increase in production, which is outpacing weaker export demand. This is raising concerns about excess supply and weighing on prices.

Additional pressure came from a 0.64% decline in Chicago soyoil futures, as palm oil competes with other vegetable oils in the global market. At the same time, stable crude oil prices, with Brent holding above $100 per barrel, helped limit losses by supporting palm oil’s attractiveness as a biodiesel feedstock.

The Malaysian ringgit weakened 0.1% against the dollar, making palm oil slightly cheaper for foreign buyers. However, this was not enough to offset pressure from high inventories and sluggish export demand.

Tags: prices, Malaysia, palm oil