Palm slips on high stockpiles

Malaysian palm oil futures slipped on Tuesday, according to Business Recorder, after a small gain in the prior session as heavy inventories kept prices under pressure. By midday, the December contract on the Bursa Malaysia Derivatives Exchange had lost 39 ringgit, a 0.84% decline, trading at 4,598 ringgit ($1,125.86) per tonne.

Cheang Kang Wei, an analyst at Singapore brokerage StoneX, said the weak September data was already priced in, since prices fell before and after the Malaysian Palm Oil Board published its numbers. Malaysian palm oil stockpiles rose to 3.51 million tons in September as output hit a record high, exceeding market expectations. He added that the main question is whether inventories keep climbing in October, although growth could moderate by November if exports stay above 1.5 million tons and output holds near 2.0 million tons.

Cheang warned that if demand falls short while output stays near record levels, inventories might remain above 3.5 million tons for an extended period. Cargo surveyors put October 1-10 exports up between 33.5% and 37.7% from a month earlier, while weaker crude futures make palm less attractive for biodiesel. Attention is also shifting to 2027 supply risks, such as the delayed effect of El Niño and rising biodiesel use in Indonesia under B50.