Palm ends lower for third session despite strong export demand

Malaysian palm oil futures ended lower on Wednesday, marking their third consecutive daily decline, despite robust export demand ahead of the Diwali festive season in India. The benchmark January palm oil contract on Bursa Malaysia Derivatives Exchange slipped 14 ringgit, or 0.3%, to 4,687 ringgit ($1,149.90) per metric ton at the close.

Traders noted a morning surge due to the strong export performance seen in recent weeks in anticipation of the Diwali season. David Ng, a trader at Iceberg X Sdn Bhd, explained that cargo surveys indicated a 46.9% to 67.7% increase in Malaysian palm oil product exports from October 1-25 compared to the previous month.

Oil prices increased by over 1% following an attack on a Saudi Arabian refinery, the world's leading crude exporter, reigniting supply risk concerns due to Middle Eastern conflicts. Palm oil emerged as a more attractive option as a biodiesel feedstock with higher crude oil prices. Dalian's most-active soyoil contract rose 0.65%, whereas its palm oil contract declined 0.4%.

Palm oil's price movements mirror those of other edible oils due to the intense competition for a share of the global vegetable oils market. European Union soybean imports for the 2026/27 season, which started in July, totaled 3.8 million metric tons by October 25, a decrease of 2% from the same period last year. Conversely, palm oil imports had fallen by 21% to 0.8 million tons, according to European Commission data.

The ringgit, which is the palm oil commodity's trading currency, rose by 0.32% against the US dollar, making it pricier for foreign currency holders.