The global palm oil market is currently charting a cautious path as participants weigh seasonal output gains against uncertain demand and external market volatility. Malaysia’s Derivatives Exchange (MDEX) futures have fluctuated in recent weeks, rebounding from technical lows but remaining capped by weak crude oil prices and narrowing spreads versus rival oils. Price recovery attempts, spurred by firm soyoil and a softer ringgit, have been repeatedly checked by fears of swelling inventories and bearish energy markets. At the same time, Southeast Asia’s weather outlook for July–August is relatively benign, with regular monsoon rainfall stabilizing yield expectations after earlier harvest concerns. Nevertheless, export demand, especially from India and China, is being closely monitored as local refiners react to shifting government policies and global blending mandates for biodiesel. Traders are wary of technical resistance and are closely watching support near MYR 4,150–4,180/t for key contracts.
📈 Prices: MDEX Palm Oil Futures (as of Oct 2025, in MYR/t & EUR/t)
| Contract | Close (MYR/t) | Change | Change (%) | EUR/t1 | Market Sentiment |
|---|---|---|---|---|---|
| Oct 25 | 4,340 | +35 | +0.81% | 869 | Neutral |
| Nov 25 | 4,322 | -2 | -0.05% | 866 | Neutral/Bearish |
| Dec 25 | 4,352 | 0 | 0.00% | 873 | Neutral |
| Jan 26 | 4,375 | -1 | -0.02% | 877 | Neutral |
| Feb 26 | 4,380 | -2 | -0.05% | 878 | Neutral |
| Mar 26 | 4,367 | -2 | -0.05% | 875 | Neutral |
| Apr 26 | 4,333 | -2 | -0.05% | 867 | Bearish |
| May 26 | 4,284 | +1 | +0.02% | 857 | Bearish |
| Sep 26 | 4,151 | +4 | +0.10% | 831 | Bearish |
1Assumed rate: 1 EUR = 5 MYR for comparability (actuals vary)
🌍 Supply & Demand Drivers
- Export demand: Recent data show firm shipments to India and Pakistan; China’s pace moderate but steady.
- Output: Malaysian palm oil production has entered its seasonally high period; Indonesia’s supply is also robust but facing logistical constraints in some regions.
- Inventories: Malaysian stocks expected to top 1.9–2.0 million tons through July/Aug as output overtakes export growth, putting near-term pressure on prices【6:8†full-posts-2025.json】.
- Biofuel demand: Indonesia’s B40 mandate continues to support internal usage, but slow global biodiesel growth caps further upside.
- Speculative positioning: Managed funds trimmed longs after the latest rally failed at technical resistance; some short hedging visible by producers【6:10†full-posts-2025.json】.
📊 Fundamentals
- Global output: USDA pegs 2024/25 world palm oil production at 79.83 million t (down ~0.36 Mt YoY)【6:3†full-posts-2024.json】.
- Consumption: Steady to slightly weaker as food oil demand softens and biofuel use growth slows.
- Stocks: Global vegetable oil ending stocks seen down at 30.06 Mt, with palm oil accounting for the bulk of the reduction.
- Major players: Indonesia and Malaysia remain dominant, with India and China as the largest buyers. India’s import duties and festival-driven demand are pivotal in Q4.
- Price comparison: Palm oil remains at a premium to sunflower and soybean oil in key markets (RBD palm oil: ~USD 0.74/kg vs. soybean oil: ~USD 0.66/kg)【6:1†full-posts-2024.json】.
🌦️ Weather Outlook
- 🌧️ Malaysia & Indonesia: July monsoon delivers regular rainfall, boosting soil moisture and stabilizing yields, though local flooding risk persists in East Malaysia.
- ⛅ Western Indonesia: Seasonal showers—minor delays but no significant crop impact expected short-term.
- 💨 El Niño/La Niña status: Influence currently neutral; no severe shocks anticipated for July–August.
📉 Global Production & Stocks (2024/25, Mt)
| Country | Production | Ending Stocks |
|---|---|---|
| Indonesia | 48.3 | 3.8 |
| Malaysia | 19.1 | 2.0 |
| Thailand | 3.4 | 0.6 |
| India (importer) | 0.3 | 1.0 |
| China (importer) | 0.5 | 0.7 |
USDA and local government figures
📌 Trading Outlook & Recommendations
- Markets look set to consolidate in a range between MYR 4,100–4,350/t absent new shocks.
- Sellers should look to hedge downside above MYR 4,300/t for fall/winter delivery.
- Watch for export pickup to India during festival season; stronger shipments could spur prices even as output rises.
- Buyers may consider staggered coverage if MDEX approaches 4,150/t or dips below technical support at 4,100/t.
- Monitor crude oil trends and Dalian/Chicago soyoil for cross-market signals.
- Macro and weather stability could offer rebounds, but inventories now cap sharp rallies.
📆 3-Day Regional Price Forecast (MDEX, Main Futures)
| Date | Expected Range (MYR/t) | Trend/Outlook |
|---|---|---|
| July 2 | 4,280 – 4,350 | Sideways/Consolidation |
| July 3 | 4,220 – 4,340 | Mildly Lower – Output pressures |
| July 4 | 4,170 – 4,330 | Neutral, watch for export data bounce |
Sources: USDA, MDEX, MPOB, CBOT, market vector data, latest web updates