Malaysian palm oil futures extended losses on Thursday after an industry report confirmed a rise in inventories due to weaker exports and higher production.
The Bursa Malaysia Derivatives' October crude palm oil contract fell 1.25% to 4,727 Malaysian ringgit ($1,168.75) per metric ton -- a third straight session of price fall. The November contract lost 1.53% to 4,890 ringgit/mt.
Malaysian palm oil stockpiles rose 7.48% month over month to 2.8 million metric tons in August, the highest since December 2025, according to Malaysian Palm Oil Board data. Inventories were also higher compared with the previous year's 2.2 mmt.
Stocks climbed as exports fell 7.5% from a month earlier to 1.3 mmt, while output grew 1.4% to 1.8 mmt.
Inventory growth "reflects ample supply and a relatively loose supply-demand balance, factors that are expected to weigh on spot prices," market intelligence provider SunSirs said.
In top importer India, aggressive buying of edible oils ahead of festivities congested ports and filled up storage capacity, bringing imports to between 1.5 mmt and 1.9 mmt in August, market sources told S&P Global. India's purchases of crude palm oil likely came in at 793,636 metric tons during the month, lower than soybean oil imports of 858,706 mt.
Cheaper prompt shipments relative to deferred cargoes triggered large-scale buying despite slow consumption, potentially reducing India's appetite for edible oil in the coming months, the research firm said.
Nonetheless, a weakening local currency could boost export attractiveness, while elevated crude oil prices could improve biofuel economics, providing some demand upside.
In Indonesia, supply uncertainties due to drought and forest fires continued to provide upward momentum, while the roll-out of a higher 50% biodiesel blend was adding near-term support.
The government targets to fully implement B50 by Oct. 1, and explores raising the policy further to B60 next year to reduce reliance on diesel imports.