Malaysian Palm Oil Market Update – June 20, 2025
Malaysian palm oil futures traded in a narrow band on Thursday, supported by gains in rival edible oils from China and a softer local currency, while weaker crude oil prices limited the upside.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange (BMDEX) gained 2 ringgit, or 0.05%, to settle at 4,102 ringgit per metric ton in early trade.
This marked the second consecutive session of gains, signaling modest optimism in a market that remains range-bound amid conflicting global cues.
Support from Dalian Soyoil and Ringgit Weakness
The upside in palm oil prices was largely attributed to stronger soyoil prices on the Dalian Commodity Exchange, which lifted market sentiment across the vegetable oils complex. Palm oil competes directly with soyoil for market share in food and biofuel applications, making its price sensitive to movements in rival edible oils.
At the same time, a weaker Malaysian ringgit against the U.S. dollar improved the competitiveness of ringgit-denominated palm oil exports for international buyers, adding marginal support to prices.
Crude Oil Slips, Limiting Biodiesel Demand
Offsetting this support, crude oil prices declined after a sharp rally earlier in the week, weighing on sentiment for palm oil as a biodiesel feedstock. Lower crude prices make biofuels less attractive, potentially softening industrial demand for palm-based biodiesel.
The market remains cautious as investors continue to watch geopolitical developments in the Middle East, which have pushed oil prices higher in recent days but now show signs of stabilizing.
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Outlook
Market analysts suggest that palm oil futures will likely remain range-bound in the near term, influenced by competing forces such as:
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Currency movements
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Demand from top buyers like India and China
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Weather patterns in key producing regions (Malaysia and Indonesia)
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Trends in rival oilseed markets
Traders are also awaiting export data for the second half of June from cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia to gauge global demand momentum.