Palm Oil Rallies on Tighter Supply, Firm India Demand

Malaysian palm oil futures surged over 2-1/2% to around MYR 5,015 per tonne, extending recent gains as trade resumed after a holiday. A weaker ringgit and expectations of tighter supply underpinned sentiment, with Indonesia’s B50 biodiesel mandate set to divert more palm oil to domestic use and El Niño risks clouding output in Indonesia and Malaysia. Crude oil prices holding above USD 100 per barrel further boosted palm’s appeal as a biodiesel feedstock. In India, the world's largest palm oil consumer, August imports rose 7% month-on-month to 782,761 tonnes, the highest since February, as refiners replenished stocks ahead of the festival season between August and November. Separately, Malaysia raised its October crude palm oil reference price, keeping the export duty at 10%. However, weaker exports tempered upside momentum, with cargo surveyors estimating shipments fell between 17.8—25.6% in the first half of September compared with the same period in August.