Malaysian palm oil has been declining for six consecutive sessions, and yesterday, futures fell to a 3-week low in anticipation of production and export data for July. Experts believe that importers have built sufficient stocks, leading Malaysia to reduce shipments in August after active exports in June and July.

In July, Malaysian palm oil exports increased by 7.8% compared to June according to AmSpec Agri Malaysia and by 14% according to Intertek Testing Services (ITS).

September futures for palm oil on the Bursa Malaysia fell by 0.23% to 3872 ringgits per ton or 855 US dollars per ton on Tuesday, losing 7.2% for the week.

The Malaysian Palm Oil Board (MPOB) stated that crude palm oil prices in Malaysia in the second half of 2023 would range from 3700 to 4200 ringgits per ton and receive long-term support. However, there is a possibility that by the eve of 2024, prices may rise to 4300 ringgits per ton or 952 US dollars per ton and higher due to uncertainty in sunflower oil supplies from the Black Sea region and palm oil production in Malaysia, which turned out to be lower than expected.

In the first half of 2023, palm oil production in Malaysia (the second-largest global producer) decreased by nearly 3% compared to the same period in 2022.

By December 2023, the largest global buyers – India and China – will import a total of 16.5 million tons of palm oil compared to 15 million tons in 2022.

“In the ASEAN and MENA regions, there will be increased demand for palm oil due to its competitive price and a deficit in domestic production,” experts from MPOB predict.

Shipments of sunflower oil from Ukraine to Asian countries are limited due to port blockades, which is contributing to increased sales of palm oil.