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Asia Biofuels Update: Palm Oil Weakens Ahead of Key Industry Data

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Malaysian palm oil futures dipped on Wednesday ahead of the release of monthly industry data, which market participants expect to show a drop in exports and a buildup in inventories.

The Bursa Malaysia Derivatives' October crude palm oil contract extended losses for a second straight session and fell 0.42% to 4,786 Malaysian ringgit ($1,183.34) per metric ton. The November contract eased 0.34% to 4,959 ringgit/mt.

The Malaysian Palm Oil Board will release August industry data on Sep. 10.

Cargo surveyors reportedly estimated Malaysia's shipments in August to have dropped 6.5% to 14.9% from a month earlier.

Meanwhile, stockpiles have likely risen to their highest level since January due to weak demand from top importer India despite upcoming festivities, according to market participants and analysts surveyed by Bloomberg.

Demand from key buyer China was also under pressure due to high domestic inventories and the deep inversion of the soybean oil-palm oil spread, price reporting agency MySteel said.

In the EU, palm oil imports for the current 2026/27 marketing year, which began in July, reportedly dropped 18% year over year to 490,000 metric tons.

Going forward, Indonesia's B50 roll-out, which may tighten exportable supplies once fully implemented in October, is expected to support prices.

The higher biodiesel blend has cut the country's diesel imports by half and resulted in foreign exchange savings, Antara reported, citing the Ministry of Energy and Mineral Resources.

Weather-driven supply risks are also expected to boost prices, particularly with rising uncertainties over Indonesian output following forest fires in several areas.

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