Malaysian palm oil futures fell to their lowest level since June on Thursday, as traders braced for official data expected to show a record stockpile in the world's second-largest producer. The benchmark January 2027 contract on Bursa Malaysia Derivatives dropped 119 ringgit to 4,377 ringgit a ton at the close on Nov. 5, according to Bernama, the state news agency.

The slide matters well beyond Kuala Lumpur. Palm oil is the cheapest major vegetable oil and the main cooking fat for hundreds of millions of consumers from India to Indonesia, and its price feeds into food inflation, biodiesel costs and the earnings of listed planters in Malaysia, Indonesia and Singapore. Lower prices help importers such as India, Pakistan and China, but squeeze growers just as they enter the seasonal output peak.

Fourth straight loss for palm oil

Reuters reported that losses had extended to a fourth straight session by early Thursday trade. The decline left the January contract 272 ringgit, or about 5.9%, below where it closed on Monday, Bernama data show. It fell 98 ringgit on Tuesday and 55 ringgit on Wednesday before Thursday's steeper drop.

Losses were heavier at the front of the curve. The November 2026 contract slid 174 ringgit to 4,126 ringgit, and the physical price for November delivery in southern Peninsular Malaysia fell 90 ringgit to 4,220 ringgit a ton. Data from Trading Economics showed prices at their lowest since June.

Bernama attributed Thursday's decline mainly to weaker soybean oil futures on the Chicago Board of Trade, a rival oil whose price palm usually tracks. Reuters said palm was also pressured by softer crude oil, which reduces the appeal of palm-based biodiesel.

David Ng, a proprietary trader at Iceberg X in Kuala Lumpur, told Bernama that record-high inventories continued to limit buying interest. He put immediate support at 4,450 ringgit and resistance at 4,600 ringgit, levels the most active contract had already broken below by the close.

Record Malaysia stocks expected despite export rebound

The main worry is supply. A Reuters poll cited by Ng on Tuesday forecast Malaysian palm oil stocks at the end of October at 3.75 million tons, up 6.8% from 3.51 million tons at the end of September, which was already a record. The poll put October production up 3.8% at 2.20 million tons.

Anilkumar Bagani, head of commodity research at Mumbai-based Sunvin Group, told Bernama he expected stocks even higher, at 3.81 million tons, an 8.47% monthly rise.

That buildup is happening even though demand recovered sharply in October. Cargo surveyor Intertek Testing Services estimated Malaysia's exports for the month at 1.65 million tons, up 45.41% from September, and AmSpec Agri Malaysia also put shipments at 1.65 million tons, a 73.46% increase on its own September estimate, Bagani said. The Reuters poll expected exports to rise 42.8% to 1.60 million tons.

Bagani also pointed to the absence of a Malaysian export tax waiver, which had weighed on sentiment at the start of the week. Competition from Indonesia, the largest producer, also matters; Capital Times reported earlier on how Indonesia's palm oil reference price feeds into its export goals.

What Asian buyers and planters watch next

For importers in South Asia and China, cheaper palm oil widens its discount to soybean and sunflower oil and could encourage forward purchases for the first quarter. For plantation companies, lower prices arrive at a time of rising output, so revenue per ton is falling just as volumes climb.

Trading volume on Bursa Malaysia Derivatives narrowed to 97,181 lots on Thursday from 137,168 lots on Wednesday, while open interest rose to 336,631 contracts, Bernama reported. Rising open interest during a decline usually signals that new short positions are being added.

The next test comes on Nov. 10, when the Malaysian Palm Oil Board publishes its October supply and demand report. A stock figure above 3.75 million tons would confirm the record that the market has been pricing in all week.