Palm oil prices set to stay above US$1,040 a tonne

Ongoing US-China trade tensions and increasing global soyabean stocks would also drive price movement, according to the MPOC.

Vegetable oil prices were expected to remain firm for the rest of this year, supported by strength in palm and soyabean oils, the 22 October report said.

“Diminishing exportable soyabean oil supplies from Argentina are likely to lift prices in the coming months, while ongoing speculation over Indonesia’s B50 biofuel mandate will continue to lend support to palm oil,” the council said in a statement.

The MPOC said palm oil was trading at a premium to soyabean oil in the global market, with prices as of mid-October at US$42/tonne higher in Europe and US$26/tonne higher in India, reversing a brief discount period from April-September.

Meanwhile, Malaysia’s palm oil exports increased by 102,000 tonnes – a 7.7% month-on-month increase – to 1.42M tonnes in September, with most regions recording gains except the European Union (EU) and Asia Pacific.

The MPOC said the largest improvement came from South Asia, where exports to India reached 312,000 tonnes, the highest in 11 months, while shipments to Sub-Saharan Africa, the Middle East and North Africa, the Americas and Central Asia also increased during the month.

“Palm oil stocks in September climbed to 2.36M tonnes, the highest in 22 months, even though export growth outpaced production,” the council said.

“The increase was largely driven by domestic consumption normalising to its usual range of between 300,000-350,000 tonnes/month, after reaching a record monthly high of 499,000 tonnes in August.”

Palm oil imports also increased by 20,000 tonnes – a 33.9% month-on-month increase – further contributing to the stock buildup.

Tags: Vegetable Oil, India, palm oil, stocks, soyabeans, China, prices