Palm oil prices fall despite sharp rise in Malaysian exports

Malaysian palm oil futures declined on October 15, ending a three-session winning streak. The main factor behind the decline was weaker rival vegetable oil prices on Chinese and US exchanges, which outweighed positive Malaysian export data. December futures on the Bursa Malaysia Derivatives Exchange fell by 78 ringgit, or 1.66%, to close at MYR 4,622/t ($1,132.84/t).

Additional pressure on the market came from declining soybean and palm oil prices on international exchanges. On China’s Dalian Commodity Exchange, the most actively traded soybean oil contract fell by 1.98%, while palm oil futures lost 3.03%. Meanwhile, soybean oil futures on the Chicago Board of Trade (CBOT) declined by 0.92%. As palm oil competes with soybean oil and other vegetable oils in the global market, movements in rival oil prices directly influence Malaysian quotations.

At the same time, export statistics indicate a significant recovery in demand for Malaysian products. According to cargo surveyors, Malaysian exports of palm oil and related products increased by 43.2–58.3% during October 1–15 compared with the same period in September. India, one of the world’s largest vegetable oil importers, also showed positive demand trends. According to the Solvent Extractors’ Association of India (SEA), the country’s palm oil imports rose by 4.5% month-on-month in September to 817.9 thsd tons.

Prices were also affected by weaker crude oil markets, with crude oil quotations falling by approximately 2% on October 15. Lower crude oil prices reduce the competitiveness of palm oil as a feedstock for biodiesel production, adding further pressure on its value. Meanwhile, a slight 0.02% appreciation of the Malaysian ringgit against the US dollar made palm oil marginally more expensive for foreign buyers.

Another factor influencing the market was Malaysia’s decision to lower its November reference price for crude palm oil while maintaining the export duty at 10%. Thus, despite a sharp acceleration in export shipments and increased purchases by India, palm oil prices remain under pressure from weaker related markets. Further price movements will depend on demand from major importers, changes in soybean oil and crude oil prices, and the pace of Malaysian exports.

Tags: Malaysia, palm oil, prices