Palm stays rangebound on El Niño concerns
KUALA LUMPUR: Malaysian palm oil futures traded in a tight range on Monday, as traders looked past near-term consolidation to price in the risk of an El Niño-driven output disruption next year. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange inched up 0.19% to 4,816 ringgit ($1,181.84) a metric ton by the midday break. The contract fell 0.3% in the…
Malaysian palm oil futures remained rangebound on Monday, with traders considering the potential impact of an El Niño weather pattern on production next year. The benchmark November palm oil contract on Bursa Malaysia Derivatives Exchange increased by 0.19% to 4,816 ringgit ($1,181.84) per metric ton. The contract had fallen by 0.3% in the previous session.
Crude palm oil futures were in contango, with far-month contracts trading above 5,000 ringgit, indicating some market participants' expectations of supply tightness in 2027 due to potential El Niño weather effects. Indonesian President Prabowo Subianto proposed a new exchange to set prices for the country's strategic commodities, aiming to leverage its natural resources for growth.
Palm oil prices track those of other edible oils, competing for a share in the global vegetable oils market. Oil prices surged due to fading hopes of a US-Iran peace deal and slower tanker traffic through the Strait of Hormuz, heightening geopolitical risks. The Malaysian ringgit strengthened by 0.22% against the dollar, making the commodity slightly pricier for foreign buyers.
Cargo surveyor Intertek Testing Services reported a 7.9% drop in Malaysian palm oil exports from August 1-15, while AmSpec Agri Malaysia is set to release its figures later.
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