MALAYSIA: Palm oil futures extended losses to below the MYR 4,230-per-tonne level in the first week of July, the lowest level since September 2021 as supply is outpacing demand.
Top palm oil producer Indonesia increased its export quota and it now allows palm oil producers to export seven times the amount it sold domestically from previously five times to reduce high domestic inventories. Indonesia has recently announced an export acceleration scheme to ship at least 1 million tonnes of crude palm oil and derivatives and also reduced the maximum export tax rate and levy for crude palm oil to $488 per tonne from $575 per tonne to boost shipments.
At the same time, in Malaysia, the production is expected to increase in the months ahead on higher crops and as migrant workers return.
Malaysia’s palm oil inventories at the end-June likely climbed to their highest levels in seven months, as exports for June fell between 10% and 13.4% from the same period in May, according to cargo surveyors