Palm oil prices have risen to a four-month high

Malaysian palm oil futures rose by more than 2% on Monday to around MYR 4,820/t, reaching their highest level since early April. The market was supported by stronger vegetable oil prices in China and bargain buying following the recent decline.

One of the key drivers was stronger demand from India, the world’s largest vegetable oil importer. India’s vegetable oil imports reached a 10-month high of 1.48 mln tons in July as refiners replenished inventories ahead of the festival season.

In particular, India’s palm oil imports jumped 50% from June to 731 thsd tons, the highest level in five months. Soybean oil purchases increased by 31% to 499 thsd tons, while sunflower oil imports rose by 4% to 252 thsd tons.

At the same time, further price gains are being limited by high inventories in Malaysia. Stocks climbed to a five-month high in July as production outpaced exports.

Weaker export dynamics are also weighing on the market. According to Intertek, Malaysian palm oil shipments during August 1–15 fell by 7.9% compared with the same period in July. Further price movements will therefore depend on whether strong Indian demand can offset high inventories and weaker exports.

Tags: prices, Malaysia, palm oil