Palm OIl Rebounds

Malaysian palm oil futures hovered above MYR 4,850 per tonne, reversing recent declines amid gains in rival edible oil markets. Bargain hunting also emerged after prices hit a two-week low. Firmer crude oil, underpinned by escalating Middle East hostilities, enhanced palm’s competitiveness as a biodiesel feedstock. Supply concerns also lingered, with unusually dry conditions and reduced fertiliser use in Indonesia and Malaysia raising risks to output. Still, upside momentum was checked by bearish monthly data from the Malaysian Palm Oil Board: August inventories climbed 7.5% to an eight-month high of 2.82?m tonnes, production edged up 1.4% to 1.82?m, and exports fell 7.5% to 1.29?m. Meanwhile, early September shipments remained weak, with cargo surveyors reporting an 11.7—17.5% drop in exports in the first 10 days versus August. Market caution also prevailed ahead of China’s August activity data later this week, with traders eyeing demand signals from another major palm oil buyer.