Palm slips on high stockpiles

Malaysian palm oil futures prices dropped on Tuesday due to high stockpiles weighing on the market, according to Bursa Malaysia Derivatives Exchange. The benchmark December palm oil contract fell 0.84%, reaching 4,598 ringgit ($1,125.86) per metric ton. Agricultural commodities analyst Cheang Kang Wei noted that Malaysia's palm oil stockpiles surged to 3.51 million metric tons in September, surpassing expectations.

However, Cheang is uncertain if stocks will continue to rise in October, as export growth should start slowing by November if exports stay above 1.5 million tons and production stabilizes around 2.0 million tons. If demand disappoints and production remains near record levels, stock levels could remain above 3.5 million tons for a longer period, continuing to put pressure on prices.

Analysts are also watching potential supply risks in 2027, including the effects of El Niño and Indonesia's increasing biodiesel demand under B50. Cargo surveyors reported that exports of Malaysian palm oil products for October 1-10 grew by 33.5% to 37.7% from the previous month. Oil prices fell, with palm oil contracts down 1.05% on Dalian's soyoil market and 0.55% on Chicago Board of Trade soyoil prices.