Market players expect weaker Malaysian palm oil exports in November (down 10- 20%), whilst production is expected to decline 5-10% month-on-month. With looming monsoon concerns potentially disrupting transportation, the market could face tighter supplies and lower end stocks heading into year-end.
Palm oil’s anomalous price premium over soybean oil ($130-140/mt) and sunflower oil is viewed as unsustainable according to some traders spoken to by Expana. Therefore, buyers may seek alternative oils
lowering palm oil demand over December.
Indonesia’s increase in the palm oil levy in December of circa $62/mt could increase palm oil prices from Indonesia, thereby adding significant price pressure to the market. However, traders commented to Expana that demand at the current price levels is tepid and further price increases could limit demand.