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Asia Biofuels Update: Palm Oil Rises, Heads for Weekly Gains

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Malaysian palm oil futures firmed on Friday alongside crude oil and soybean oil, and were on track for weekly gains amid strong export demand, particularly from top buyer India.

The Bursa Malaysia Derivatives' September crude palm oil contract rose 0.37% to 4,625 Malaysian ringgit ($1,130.61) per metric ton, bringing weekly gains to 0.41%. The October contract inched up 0.66% to 4,755 ringgit/mt, with weekly gains at around 1.67%.

Malaysia emerged as the top supplier of palm oil to India during the first nine months of the 2025/26 marketing year, followed by Indonesia, The Hindu Business Line reported, citing data from Solvent Extractors' Association of India.

In July, India's palm oil imports reportedly reached their highest in five months at 730,965 metric tons, as purchases grew 50% from the June level. Coupled with higher soybean oil purchases, the country's total edible oil imports reached their highest since September 2025 at about 1.5 million tons.

Upcoming festivities in India are currently lifting demand, with palm oil purchases likely to sustain a strong momentum in August at above 700,000 mt, according to Sunvin chief executive Sandeep Bajoria, as cited by Reuters.

This will boost Malaysia's shipments, which have so far risen in the first 10 days of August by 2.6% to 14.8% from a month earlier, according to cargo surveyor estimates. In June and July, exports grew 7.2% and 14.5% month-over-month, respectively.

For September, palm oil reference prices will be lower while export duty will be maintained at 10%, according to a circular by the Malaysian Palm Oil Board.

This "will reduce export costs and enhance the competitiveness of its supplies in the international market," market intelligence provider SunSirs said. "This move reinforces expectations of ample supply, exerting generally bearish pressure on both spot and futures prices for palm oil."

Going forward, weather-related supply risks and progress in Indonesia's higher 50% biodiesel blending mandate will underpin fundamentals and support prices.

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