Palm oil prices to stay firm next month on India demand, soybean prices, says industry council
Palm oil prices are likely to stay firm next month, driven by strong Indian festive demand and elevated US soybean oil prices, according to the Malaysian Palm Oil Council. Prices may hover between RM4,100 and RM4,300 per tonne. However, abundant global soybean supply may cap gains. India’s Diwali restocking is seen supporting export momentum.
KUALA LUMPUR (July 22): Palm oil prices are expected to remain firm next month, supported by firm festive demand from India and elevated US soybean oil prices, the Malaysian Palm Oil Council said on Tuesday.
Crude palm oil may trade between RM4,100 and RM4,300 per tonne, according to forecasts from the industry council also known as MPOC. However, any rally in vegetable oil prices may be capped by abundant global oilseed supply, particularly soybeans, the key substitute for palm oil, MPOC said.
“Rising US demand alone is insufficient to offset the anticipated surge in global soybean supply,” the council noted.
Prices of the edible oil used in everything from infant formula to biodiesel have remained above the RM4,000 per tonne mark in recent months amid concerns over output following unfavourable weather conditions and floods in several key producing states in recent months.
Current forecast calls for South American soybean production to increase to 245 million tonnes in 2026. The ample supply is expected to weigh on soybean prices, with US inventories projected to double from 2023 levels due to high carry-over and a steep decline in exports to China.
A US biofuel policy announced in mid-June is expected to spur demand for domestically produced feedstocks, MPOC said.
The strong soybean oil prices have improved the price competitiveness of palm oil, significantly boosting Malaysian palm oil exports to India, the world’s top edible oil importer, since April and remained consistently above 250,000 tonnes in both May and June.
The momentum is expected to extend into the third quarter, supported by restocking ahead of the Diwali festival in mid-October, the council said, noting that India is projected to import around 2.9 million tonnes of palm oil to meet festive season demand in the third quarter.
“This firm buying interest will continue to support palm oil prices,” MPOC added.
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Source : The Edge Malaysia
