Palm hits 13-week low, on track for second straight weekly loss

Malaysian palm oil futures have been sliding for a sixth consecutive day, hitting their lowest level in 13 weeks as weak export data and high inventories weigh on prices. The December delivery contract on the Bursa Malaysia Derivatives Exchange fell 0.57% to 4,528 ringgit per metric ton by midday, after dipping to its lowest point since July 3 earlier in the day.

This decline is part of a broader trend where the contract has lost 3.08% this week. Experts attribute this downward pressure to poor export performance, higher domestic production, and a growing stockpile of over 3 million tons. September saw a significant drop in Malaysian palm oil exports, ranging from 17.1% to 28.8% compared to August, according to cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia.

Palm oil, like other edible oils, is sensitive to global vegetable oil price movements as it competes for market share. Industry analyst Thomas Mielke predicts that global vegetable oil prices could rise in the coming months and into 2027 due to limited supply caused by disrupted Black Sea sunflower-oil shipments and declining South American soyoil exports.

Despite expectations of lower production next year due to El Niño conditions, palm oil prices are expected to hover between 4,500 and 5,000 ringgit per ton through December, as the current high stocks put downward pressure on prices. If the benchmark contract breaks below 4,478 ringgit per ton, analysts warn that this could signal further downside towards 4,445 ringgit.