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China’s most-traded palm oil futures contract on the Dalian Commodity Exchange, for September delivery, tumbled as much as 8% to hit 7,456 yuan per tonne, the lowest level since the end of 2021. The September soybean oil contract on the bourse is slumping more than more than 7% to hit 8,574 yuan per tonne.
China, the world’s second-largest palm oil buyer, will increase its purchases of the tropical oil from Malaysia, Bernama reported, citing Chinese Foreign Minister Wang Yi.
Malaysia’s palm oil exports to China rose more than 13% in June month-on-month to 96,496 tons, according to data from the Malaysian Palm Oil Board on Tuesday, though shipments slid 55% from the same period last year.Â
China’s palm oil futures have been in a steep downtrend since June on expectation of rising supply. Earlier in July, a Malaysian government official said that the country was considering expanding a mandatory palm oil mix in its biodiesel to 35% from 30%, as authorities look for ways to stimulate palm fruit purchases from farmers after a slowdown in exports.
Malaysia’s palm oil stocks at end-June rose by 8.76% from the previous month to hit 1.66 million tonnes, their highest in seven months, according to MPOB data, as its exports were throttled by rival Indonesia’s policies to boost its own shipments. Crude palm oil production climbed 5.76% from May to 1.55 million tonnes, also at a seven-month peak.
Indonesia reversed a short-lived export ban in May and instead imposed a string of rules to encourage overseas shipments. Indonesia last week said it plans to increase the content of palm oil-based fuel in its biodiesel to 35%, known as B35, from 30%, starting on July 20.
