Malaysian crude palm oil futures closed little changed Tuesday, with the benchmark contract at approximately $1,099 per tonne (RM4,497), down 0.1% from the prior session. The global World Bank benchmark stood at $1,105, while Indonesia’s reference price was set at $1,030 per tonne.
MPOB confirms supply build
Malaysia’s June production rose 8.1% month-on-month to 1,638,777 tonnes, pushing closing stocks to 1,332,697 tonnes, a 3.7% increase from May, according to MPOB data. Exports climbed 6.2% to 1,204,013 tonnes, while imports surged 135.3% to 103,113 tonnes, partly reflecting arbitrage flows from Indonesia. The fresh fruit bunch reference price slipped 1.3% to RM48.90.
Weather and energy support
El Niño conditions persist with an ONI of +1.0, though rainfall across producing belts remains broadly normal, limiting immediate yield stress. Brent crude edged up 0.4% to $92 per barrel, lending support to biodiesel blending economics. Indonesia’s B50 biodiesel mandate continues to underpin longer-term demand expectations, with officials stating the programme will boost palm oil use and cut fuel imports.
Weak rival oils weigh
Palm oil slipped again Tuesday as rival edible oils weakened, with soybean oil under pressure from expanding US domestic crushing capacity and a large Brazilian harvest. China’s vegetable oil outlook remained unchanged, while India—the world’s largest vegetable oil importer—saw a 30% drop in June edible oil imports amid lower palm and soybean purchases. Experts have urged New Delhi to make import duties more flexible to manage price volatility.
Regional dynamics
Thailand has tightened palm oil export controls, reshaping regional supply flows, while Indonesia’s weak rupiah (17,938 per dollar) is encouraging higher export volumes. The ringgit held at 4.09 per dollar, offering some cost relief for Malaysian exporters.
Outlook
Our model outlook points to a bearish bias over the next seven trading days, pressured by negative seasonality, broad July weakness, and rising Indonesian shipments. Rally potential remains capped by ample supply, though support from crude oil and biodiesel mandates limits downside. The Malaysian Palm Oil Council sees CPO prices trading between RM4,400 and RM4,650 in August.
What to watch
Buyers should monitor Indonesia’s export pace amid the weak rupiah and any further clarity on India’s import duty structure, as these factors will shape near-term price direction.