Palm Oil Recovers But Faces Monthly Loss on Supply Pressure

Malaysian palm oil futures strengthened, hovering near MYR4,650 per tonne after a recent decline that took prices to an eight-week low. Bargain hunting and firmer Dalian edible oils provided support, while improved September economic activity in China, a major palm oil buyer, also lifted sentiment amid easing weather disruptions and stimulus hopes. Higher global oil prices, which are on track for a third straight monthly gain, further lent support by improving the relative appeal of palm oil as a biodiesel feedstock. In India, import duty cuts on vegetable oils ahead of the festive season improved demand prospects. However, futures are set for their first monthly decline in three months, down about 5% on weak exports. Cargo surveyors reported Sept. 1—25 shipments fell 15.1%—24.3% from August, while inventories climbed to an eight-month high in August and may exceed 3 million tonnes in September. Production surged 20.84% in the first 25 days of September, underscoring supply pressure.