Palm Oil Extends Losses

Malaysian palm oil futures fell below MYR 4,500 per tonne, declining for the second session amid weakness in Chicago soyoil. Adding to the pressure, inventories in July climbed to 2.11 million tonnes, the highest in almost two years, while output rose 7.1% to 1.81 million tonnes, data from the Malaysian Palm Oil Board showed. Still, the downside was limited by supportive factors. The ringgit weakened, making palm oil more attractive for overseas buyers. At the same time, Indonesia’s B40 biodiesel mandate continued to consume more than one million tonnes of palm oil each month since February, preventing a stock build-up in the world’s top producer. On the export front, cargo surveyors estimated that shipments of Malaysian palm oil products for the period from August 1 to 25 increased by between 10.9% and 16.4% compared to the same period a month earlier. In India, the world’s largest buyer, expectations of festive-led demand strengthened ahead of Diwali festivals in mid-October.