Palm oil prices rise on strong Malaysian exports and higher crude oil prices

Global palm oil prices continued to rise on October 23, supported by stronger Malaysian exports, higher prices for competing vegetable oils, and rising crude oil prices. At the close of trading on Bursa Malaysia, the last traded price of the benchmark January 2027 contract stood at MYR 4,817 ($1,180/t). Meanwhile, the official settlement price increased by MYR 25, or 0.52%, to MYR 4,792/t. Prices were supported by strong demand for palm oil and expectations of a seasonal decline in production.

One of the main drivers of the increase was a significant rise in Malaysian palm oil exports. According to independent cargo surveyors, shipments of Malaysian palm oil products increased by 58.5–78.4% during October 1–20 compared with the same period in September. This trend indicates a recovery in international demand and creates conditions for a reduction in inventories over the coming months. Additional support comes from the Malaysian Palm Oil Council (MPOC) forecast that prices could remain above MYR 4,600/t in November.

Higher soybean oil prices on international exchanges provided further support. On the Dalian Commodity Exchange, the benchmark soybean oil contract rose by 2% to CNY 9,125/t, while palm oil futures declined by 0.2% to CNY 9,561/t. Meanwhile, Brent crude oil prices remained near their highest levels since May amid growing risks to supplies from the Middle East. Rising crude oil prices increase the attractiveness of palm oil as a feedstock for biodiesel production, supporting demand from the energy sector.

The price increase was accompanied by stronger trading activity. Trading volume for the January contract rose by 10.3%, from 29.1 thsd to 32.1 thsd contracts, while open interest increased by 3.7% to 99.1 thsd contracts. The simultaneous rise in prices, trading volumes, and open interest indicates stronger market participation and an increase in outstanding positions amid positive price momentum.

Despite rising prices, high palm oil inventories in Malaysia remain the main limiting factor, restricting the potential for further gains. Additional pressure comes from competition with other vegetable oils, including a slight decline in palm oil futures on the Chinese exchange. According to MPOC, the market will be supported in November by strong export demand, stable biodiesel feedstock consumption, and a seasonal decline in production. However, future price movements will depend on the pace of inventory reductions in Malaysia, demand from major importers, and developments in competing vegetable oil and crude oil markets.

Tags: Malaysia, palm oil, crude oil