Palm oil prices rise to two-week high

Malaysian palm oil futures rose more than 1% on July 8, reaching their highest level in two weeks. The benchmark September contract on the Bursa Malaysia Derivatives Exchange gained 61 ringgit (+1.34%) to 4,608 ringgit/t ($1,131/t), marking the highest close since June 24.

The rally was mainly driven by stronger prices for competing vegetable oils. Chicago soybean oil futures climbed 2.19%, while soybean oil futures on the Dalian Commodity Exchange rose 0.61% and palm oil futures gained 0.38%.

Additional support came from a sharp increase in crude oil prices following renewed tensions between the United States and Iran. Higher crude oil prices improve the competitiveness of palm oil as a biodiesel feedstock, boosting market sentiment.

At the same time, physical demand for palm oil remains weak. Market participants also noted that traders are reducing positions ahead of the upcoming Malaysian Palm Oil Board (MPOB) report on production, inventories, and exports.

A slight weakening of the Malaysian ringgit against the U.S. dollar also supported the market. A weaker ringgit makes Malaysian palm oil more affordable for buyers using foreign currencies, potentially supporting exports.

Meanwhile, European Commission data showed weaker vegetable oil demand in the EU. Palm oil imports in the 2025/26 season declined 4% to 2.9 mln tons, while soybean imports fell 3% to 14.1 mln tons, reflecting softer demand in the European market.