Overstock concerns heat up, palm oil futures fall to their lowest level since June

The Zhitong Finance App learned that palm oil futures fell for the third consecutive trading day to the lowest level since mid-June due to concerns about increasing inventories in Malaysia, the world's second-largest producer of palm oil.

According to a survey of executives, traders and analysts, Malaysia's palm oil inventories expanded to a record 3.76 million tons in October, with strong production growth offsetting the impact of the surge in exports.

IcebergX senior trader David Ng said expectations of record inventories are dragging down the market. The most active contract on the Kuala Lumpur Derivatives Exchange fell 2.1% intraday to 4,455 ringgit per ton, the lowest intraday level since June 15, before recovering part of the decline.

The Malaysian Palm Oil Authority is scheduled to release official monthly supply and demand data on November 10. Before the official data was released, the market had already priced the inventory outlook in advance.

In addition to inventory factors, changes in trade policies are putting additional competitive pressure on Malaysian palm oil. David Ng pointed out that Indonesia's recent adjustment of palm oil export tariffs has put Malaysian supply at a disadvantage in terms of price competitiveness, further suppressing benchmark futures. According to reports, Indonesia is the world's largest producer of palm oil, and changes in its export policy directly affect trade flows and price fixing within the region.