Malaysian Palm Oil: futures rose to around MYR 4,170 per tonne, but are set for an over 11% weekly drop and remain close to their lowest level in a year, as domestic inventories are seen rising again in June and export volumes from Indonesia to ramp up even further.
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, up from previously five times, to reduce high domestic inventories.
The world’s largest palm oil producer plans to implement a 35% palm oil mix in biodiesel by the end of June and is considering cutting its palm oil export levy to encourage more shipments.
Meanwhile, investors await Malaysia’s palm oil board to release key June supply and demand data next week, with markets expecting end-June inventories to surge 12.3% from May. The Malaysian bourse will be closed on Monday for a public holiday.