Malaysian palm oil futures have been trading below MYR 4,000 per tonne since mid-March, reaching a seven-month low of MYR 3,338 per tonne on April 28th, amid prospects of higher production and a slowdown in global demand. El Niño weather is unlikely to affect palm oil production in Malaysia this year but could cut output between 1 to 3 million tonnes next year, the Malaysian Palm Oil Board said. According to cargo surveyors’ data, exports of Malaysian palm oil products are seen either falling or rising a meagre 0.7% for the period of May 1-25. At the same time, soaring output levels in Indonesia are set to oversupply a weaker domestic market, as low crude oil prices limited purchasing activity for palm oil as a biofuel feedstock. Additionally, the extension of the Black Sea grain deal for two more months resulted in the resumption of sunflower oil supply and prompted a decline in prices for related oils.
