Malaysian palm oil futures extended their gains on Monday, driven by a combination of firmer rival edible oils, a slight dip in the ringgit, and rising crude oil prices. The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose by 32 ringgit, or 0.77%, to 4,206 ringgit ($989.41) per metric ton by the midday break.
“Prices are supported by firm crude oil, which continues to bolster edible oil markets globally,” said Darren Lim, commodities strategist at Phillip Nova. He added that the weaker ringgit has also played a role in boosting international demand, making Malaysian palm oil more competitive in global markets.
On the Dalian Commodity Exchange, the most-active soyoil contract rose 0.25%, while palm oil contracts gained 0.62%. Meanwhile, soyoil prices on the Chicago Board of Trade saw a marginal increase of 0.02%. Palm oil typically tracks these edible oils as it competes for a share of the global vegetable oil market.
Oil prices continued their upward momentum, gaining over 2% on Friday and ticking higher on Monday. This makes palm oil more appealing for biodiesel production, especially in regions where palm-based biofuels are subsidized or mandated. The upward push in oil is fueled by expectations of additional U.S. sanctions on Russia, although Saudi Arabia’s output ramp-up and ongoing tariff uncertainties capped further gains.
The ringgit, which palm oil is traded in, weakened slightly by 0.02% against the U.S. dollar, enhancing the appeal of Malaysian palm oil to foreign buyers.
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According to Malaysia’s industry regulator, palm oil stocks rose 2.41% in June to an 18-month high of 2.03 million tons, while exports from July 1–10 jumped between 5.3% and 12% compared to the previous month, based on data from Intertek Testing Services and AmSpec Agri Malaysia.
From a technical perspective, Reuters analyst Wang Tao noted that palm oil may test support at 4,134 ringgit, with a potential downside to the 4,034–4,058 ringgit range if that level is breached.
With global demand for edible oils strong and biodiesel margins improving, the outlook for Malaysian palm oil remains cautiously optimistic.
