Malaysian palm oil futures fell for a second day as weak global demand, lower crude prices, and stronger ringgit pressured markets.
Malaysian palm oil futures continued their downward trend for a second consecutive trading session on Wednesday, pressured by sluggish buying interest from major importing countries and weakness across the broader edible oils market. Market sentiment remained cautious as traders monitored developments in competing vegetable oils, crude oil prices, and currency movements, all of which contributed to the softer tone in palm oil trading.
The benchmark July palm oil contract on the Bursa Malaysia Derivatives Exchange dropped by 62 ringgit, or 1.38%, to 4,419 ringgit ($1,125.86) per metric ton during the midday trading break. The latest decline followed a 0.78% fall recorded in the previous session, reflecting persistent selling pressure in the market amid subdued export demand.
Analysts noted that weak purchasing activity from key destination markets has continued to weigh heavily on palm oil prices. Importers have remained cautious due to fluctuating global vegetable oil prices and concerns over economic uncertainty in several major consuming regions. The absence of strong buying momentum has limited the market’s ability to recover from recent losses.
In related vegetable oil markets, futures traded on China’s Dalian Commodity Exchange showed mixed performance. The most-active soyoil contract remained largely unchanged at RMB 8,547 per ton, while the exchange’s palm oil contract slipped 0.96%. Meanwhile, soyoil futures on the Chicago Board of Trade declined by 0.52%, adding to bearish sentiment across the edible oils complex.
Palm oil prices often move in tandem with rival edible oils because they compete directly for market share in the global vegetable oils sector. Traders closely monitor movements in soybean oil, sunflower oil, and crude oil markets, as changes in those commodities can significantly influence palm oil demand and pricing trends.
Crude oil prices also added pressure to the market after ending a three-session rally. Investors adopted a cautious stance while awaiting further clarity regarding the Middle East ceasefire situation and preparing for a closely watched summit between U.S. President Donald Trump and Chinese President Xi Jinping. The uncertainty surrounding geopolitical developments and global trade relations kept broader commodity markets volatile.
Lower crude oil prices generally reduce the attractiveness of palm oil as a biodiesel feedstock, weakening an important source of industrial demand. Biodiesel producers often adjust their purchasing strategies depending on energy market trends, and softer crude oil prices can reduce incentives for blending biofuels derived from vegetable oils.
Additional pressure came from updated European Union trade data, which showed weaker imports of both soybeans and palm oil for the 2025/26 marketing season beginning in July. According to figures released by the European Commission, EU soybean imports reached 11.28 million metric tons by May 10, representing a decline of 9% compared with the same period last year. Palm oil imports into the bloc also fell by 4% year-on-year to 2.47 million tons.
Currency movements further impacted market dynamics. The Malaysian ringgit, the trading currency for palm oil, strengthened by 0.18% against the U.S. dollar. A firmer ringgit makes Malaysian palm oil more expensive for overseas buyers using other currencies, potentially reducing export competitiveness and dampening demand.
Overall, the palm oil market remains under pressure from weak global demand, softer rival edible oil prices, declining crude oil values, and currency headwinds. Traders are expected to continue monitoring export data, geopolitical developments, and broader commodity market trends for clearer direction in the coming sessions.
