Palm oil prices to remain within a narrow range in August

Crude palm oil prices are expected to remain within a relatively narrow range in August, supported by higher energy prices but constrained by weak demand from major importing countries, according to the Malaysian Palm Oil Council.

The council forecasts crude palm oil prices to trade between 4,400 and 4,650 Malaysian ringgit per ton during August. Market support is coming from biodiesel blending mandates and higher gasoil prices following renewed tensions between the United States and Iran, which have improved the competitiveness of palm and soybean oils.

However, further price gains are likely to be limited by abundant vegetable oil inventories and subdued demand across major consuming markets. Global edible oil prices have risen by about 14% since the beginning of the year due to weather-related supply concerns, although growing inventories have prevented prices from reaching new highs.

Palm oil stocks in Malaysia have climbed to their highest level in four months. Production increased by 8% month-on-month to 1.63 mln tons in June, reflecting the seasonal rise in output that typically begins in March.

Despite the current slowdown in consumption, the council expects demand to improve in the coming months. In India, where vegetable oil inventories remain elevated, pre-Diwali restocking is expected to support imports. The country typically purchases around 30% of its annual vegetable oil imports between July and September, which could provide additional support to the global market.

Tags: palm oil, prices, Malaysia