Commodities
Asia Biofuels Update: Malaysian Palm Oil Slips on Weaker Crude Oil, Market Pressures
Malaysian palm oil eased further on Wednesday as crude oil prices ended a three-session rally, and as both demand-side and supply-side pressures persisted.The Bursa Malaysia Derivatives' June crude palm oil contract slipped 1.39% to 4,388 Malaysian ringgit ($1,115.40) per metric ton. The July contract lost 1.41% to 4,418 ringgit/mt. Both contracts touched their lowest since mid-March earlier in the session.Developments on the energy market continued to influence biofuels feedstock futures. Oil prices, on Wednesday, dipped ahead of the much-anticipated Trump-Xi summit, despite a lack of progress in a peace deal between the US and Iran.A month-over-month increase in Malaysian palm oil production and a decline in exports lifted stocks in April. Industry data showed that inventories rose 1.7% to 2.3 million metric tons, as output jumped 18.4% to 1.6 mmt, and as exports weakened 14.3% to 1.3 mmt.Malaysian inventories rose for the first time since December 2025, and remained significantly higher than the year-ago levels of 1.9 mmt. CIMB Securities, as cited by Business Today, projects stocks to further rise to 2.34 mmt this month.In May, export demand trends were mixed, with Intertek Testing Services estimating shipments to have risen 8.5% during the first 10 days of the month versus the same period in April, and AmSpec Agri Malaysia assessing a 10.8% decline, Trading Economics reported.In terms of prices, CIMB Securities reportedly said palm oil futures will likely remain elevated this month, largely due to expanding biofuel programs in Indonesia and Malaysia, geopolitical tensions in the Middle East, and El Nino-related supply risks.In the plantation sector, RHB Research, as cited by Business Today, said Q2 earnings would likely recover from Q1 lows as prices firm and as production increases.