Palm oil hits 15-week high, extends gains for a third straight week

Malaysian palm oil futures climbed to their highest level in 15 weeks on July 24, posting a third consecutive weekly gain. The benchmark October contract on the Bursa Malaysia Derivatives Exchange rose 0.28% to 4,723 ringgit per ton, bringing its weekly increase to 2.74%.

According to analysts at Sunvin Group, the market was supported by persistently strong crude oil prices, a rebound in Dalian palm oil futures, expectations of tighter Indonesian exports following the launch of the B50 biodiesel mandate, and renewed buying interest from China.

On the Dalian Commodity Exchange, the most-active soyoil contract gained 1.33%, while the benchmark palm oil contract advanced 1.66%. Meanwhile, soyoil futures on the Chicago Board of Trade (CBOT) fell 0.99%. Palm oil prices typically track movements in competing vegetable oils as they compete for market share in the global edible oils market.

Higher crude oil prices also continued to support palm oil. Although oil futures eased slightly at the end of the week, they remained significantly higher amid concerns over potential disruptions to energy supplies through the Red Sea and the risk of further escalation of the conflict in the Middle East. Stronger crude prices improve the competitiveness of palm oil as a feedstock for biodiesel production.

Market participants are also monitoring developments in other oilseed markets. Brazil is expected to significantly expand its oil palm cultivation over the next decade by using already cleared land, while Rabobank forecasts the country’s 2026/27 soybean crop to decline by 2% from the record harvest of the previous season. These developments could influence the global balance of vegetable oil supplies.

Tags: prices, palm oil