Palm oil prices fall to 12-week low on weak exports

Malaysian palm oil futures posted a second consecutive weekly decline, with prices falling on Friday to their lowest closing level in 12 weeks. The December contract on Bursa Malaysia dropped 0.46% to 4,533 ringgit/t and lost 2.98% over the week.

The market remains under pressure from weak exports, improving production and expectations of further stock growth. Traders estimate that Malaysia’s ending stocks could exceed 3 mln tons, while palm oil output increased sharply in September.

Malaysian palm oil exports in September fell by 17.1–28.8% from August, according to Intertek Testing Services and AmSpec Agri Malaysia. Weaker overseas shipments are adding pressure to prices as domestic supply increases.

Analysts expect palm oil to trade between 4,500 and 5,000 ringgit/t through the end of the year. High stocks are likely to cap prices, although lower production next year due to El Niño could provide some support.

The broader vegetable oil market also remains an important factor. Disruptions to sunflower oil shipments from the Black Sea region and a seasonal decline in South American soybean oil exports could support vegetable oil prices in the coming months.

Tags: prices, Malaysia, palm oil