Demand attention remains fixed on India and China, the two largest importers of palm oil, as benchmark prices hold in a narrow band. Malaysian CPO was quoted around $1,106 per metric ton, essentially flat on the session and equivalent to about RM 4,520, while the World Bank global benchmark sat near $1,101 and Indonesia's reference price was close to $1,030. Brent crude at roughly $87 per barrel adds a biodiesel-linked demand angle, especially for Indonesian blending economics.
India's July import signals are mixed
Trade reports offer competing readings on Indian edible oil imports for July. One industry report suggests total edible oil purchases climbed to their strongest level in ten months on the back of high demand. A second report points to an 8% decline in Indian edible oil imports over the same period. The two figures may reflect differences in product coverage or timing, but they leave near-term demand visibility less clear than the headline bullish number alone would imply.
For palm oil specifically, the import mix matters. If the ten-month high is concentrated in soft oils, then palm's share may not have improved despite competitive pricing. If the 8% decline applies to palm oil volumes, it would point to weaker discretionary offtake. Before major festivals, Indian buyers typically restock edible oils, and the reported strength could be an early sign of that seasonal pull; however, contradictory data mean the seasonal upswing should not be taken for granted.
Price competitiveness and policy levers
A wide BOPO spread of about $476 per metric ton keeps palm oil attractively priced relative to soybean oil, supporting demand switching among cost-sensitive buyers in India and China. Import duty settings remain a key swing factor. India's policy framework governs how much of the price advantage palm oil can convert into actual purchases, while China's import demand tends to respond to domestic stock levels and the relative economics of vegetable oils and biodiesel feedstocks. With Brent near $87 per barrel and Indonesia's reference price around $1,030, discretionary blending demand may stay sensitive to energy-linked margins.
Supply backdrop from Malaysia
Malaysia's July MPOB data showed CPO production rising 9.4% month on month to 1,792,979 metric tons, while closing stocks increased 7.2% to 1,429,316 metric tons. Exports grew 14.5% to 1,392,178 metric tons, and imports dropped 51.9% to 49,566 metric tons. The stocks-to-use ratio of 12.5% represents a five-month high, reinforcing a bearish seasonal supply picture. Fresh fruit bunch reference price rose 1.2% to RM 49.50 per metric ton.
El Niño and model outlook
Weather remains a wildcard. ENSO is in El Niño territory with an Oceanic Niño Index of +1.4, and notable dry conditions in Kalimantan point to potential output stress later in the season. Our model outlook sees CPO caught between the bearish July stock build and ample peak-production supply on one side, and strong demand-switching support from the wide BOPO spread together with structural El Niño and B40 tailwinds on the other. Technicals are mildly supportive, but crowded speculative positioning in soybean oil raises liquidation risk. With no fresh cargo-surveyor export data and an outdated Indonesian reference price, the market is likely to trade range-bound with a slight downward bias over the next seven days; the published path is -0.0% over seven sessions.