Malaysian Palm Oil Futures See Fourth Weekly Drop
What’s going on here?
Malaysian palm oil futures dropped for the fourth straight week, finishing down 0.94% at 4,110 ringgit per ton, as inventories hit new highs and demand for biodiesel lost momentum.
What does this mean?
Palm oil – a staple in food and energy markets – just wrapped up its longest losing streak in months, sliding more than 2% this week alone. Analysts say stockpiles in Malaysia are swelling, with reserves expected to rise 3.5% in October to the highest levels since late 2023, thanks to bumper output and sluggish export growth. At the same time, lower crude oil prices are reducing palm oil’s appeal for biodiesel producers, while excess supply and softer US demand continue to drag on prices. Meanwhile, soyoil prices ticking higher in China and the US underline how any shake-up in edible oils can quickly move the global market. All eyes are on the Malaysian Palm Oil Board’s October data, set for release on November 10, to see if these trends persist.
Why should I care?
For markets: Inventories and energy prices pull the strings.
Palm oil prices are dancing to the tune of rising domestic inventories and weaker trends in the energy market. Unless demand makes a comeback or output slows down, futures could remain stuck in reverse. Because palm oil is so closely tied to biodiesel and other edible oils, market moves in Malaysia often echo across commodities markets from China to the US.
The bigger picture: Oversupply echoes through global trade.
Palm oil’s ongoing price swings show just how quickly a supply glut and soft demand for energy can ripple across the globe. With the ringgit now at 4.2240 to the dollar, Malaysia’s export competitiveness is under the microscope. These shifts directly affect food and energy security across Asia and further afield, highlighting how vital the industry is to global consumption.
