Palm oil drops on weaker Malaysian exports and stronger ringgit

Palm oil declined on concerns about the pace of exports from the second-biggest producer Malaysia and as a stronger ringgit made the tropical oil costlier for overseas buyers.

Shipments from the Southeast Asian nation slumped almost 17% from a month earlier during the first 20 days of August, according to data released by cargo surveyor Amspec Agri.

The Malaysian currency rose for a third day and was on track for the highest level since February 2023. A stronger ringgit tends to make palm oil less attractive for price-sensitive buyers in other countries.

However, prices are expected to get some support as purchases from India will rise to meet the festival season demand, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. Consumption of cooking oils typically rises in the country between September and November as Hindus celebrate several festivals, including Diwali. 

India is the world’s biggest buyer of vegetable oils, importing about 60% of its total requirements.