Palm Oil Rallies on Supply Concerns, Eyes Second Weekly Gain

Malaysian palm oil futures surged more than 3% to above MYR 4,750 per tonne, erasing prior losses and hitting a three-week high. Firmer edible oils on China’s Dalian exchange and Chicago markets boosted sentiment, while supply concerns in top producer Indonesia also added support. The Indonesian Palm Oil Association projected output to fall to 51.7 million tonnes in 2027 from 53.7 million this year, with exports seen dropping nearly 15% yoy amid rising domestic biodiesel and food consumption. Meanwhile, cargo surveyors reported Malaysian shipments jumping 33.5%—37.7% in October 1—10 from the same period in September, signaling stronger near-term demand. Robust festival buying from India, the world's largest palm oil importer, further buoyed prices. However, record-high Malaysian inventories and growing caution ahead of Q3 GDP data next week in China, a major palm oil consumer, tempered gains. For the week, futures were on track for a second straight advance, up about 3.9% so far.