Palm Oil Falls as Dalian Palm Olein Drops, Heads for Second Weekly Loss.

Palm oil prices are tracking lower with Dalian palm olein, heading for a second weekly loss. Weak rival edible oils, rising output, and sluggish demand are contributing to the decline. Indonesia's palm oil exports at 11 million metric tons in the first half are also weighing on prices.

Palm oil prices have been declining, with Malaysian futures trading lower at around MYR 4,250 per tonne, reversing gains from the previous two sessions. This downturn is attributed to several factors, including weak performance of rival edible oils on the Dalian and CBoT exchanges, expectations of higher output in the second half of the year due to improved labor conditions, and sluggish demand [1].

The July PMI data from China, a key buyer, has also dampened sentiment, as growth momentum slowed amid rising trade risks and adverse weather conditions. Despite these headwinds, palm oil prices remain on track for a second straight monthly gain, up around 6.6% so far, buoyed by a weaker ringgit [1].

Indonesia's palm oil exports, reaching 11 million metric tons in the first half of 2025, have added to the downward pressure on prices. This significant export volume is weighing on the market, contributing to the overall decline [2].

However, there are signs of optimism. India, a major palm oil buyer, is expected to increase its imports, driven by low stockpiles and favorable prices compared to soy oil and sunflower oil. Additionally, Indonesia anticipates its palm oil exports to India to exceed 5 million tonnes this year from 4.8 million in 2024, while Malaysia's exports to the U.S. surged 51.8% yoy in Jan-May 2025 [1].

Looking ahead, palm oil is expected to trade at 4365.37 MYR/MT by the end of the current quarter and at 4645.02 MYR/MT in 12 months' time, according to global macro models and analyst expectations [1].

References:

[1] https://tradingeconomics.com/commodity/palm-oil
[2] https://www.marketscreener.com/news/indonesia-s-palm-oil-exports-at-11-million-metric-tons-in-first-half-ce7c5fd2db80f026