Despite the decrease in demand, palm oil quotes continue to rise in line with oil prices

Anticipation of Israel's response to a missile attack by Iran led to a speculative rise in oil prices, which supported palm oil quotes, despite forecasts of a reduction in demand in the near term.

December Brent oil futures on Thursday and Friday rose by 5.4% to $78/barrel (+9.1% for the week and for the month).

Following them, December palm oil futures on Bursa Malaysia rose another 2.8% to 4,300 ringgit/t or $1,020/t (+6.1% on the week) on Friday, ignoring data on sharp a reduction in imports by India in September and an increase in palm oil stocks in Malaysia.

According to analysts, during September, palm oil stocks in Malaysia will grow by 3.2% to the highest level since January 2023 of 1.94 million tons, as exports will decrease by 2% to 1.5 million tons, and production - by 1.1 % to 1.87 million tons.

India in September cut palm oil imports by 34% from August to a six-month low of 530,000 tons as it became more expensive than competing oils. At the same time, the authorities increased the import duty on oil, and refiners were forced to cancel purchases.

A reduction in purchases by the world's largest importer of vegetable oils may lead to an increase in palm oil stocks in the main producers - Malaysia and Indonesia, which will increase pressure on quotations.

The pressure on the prices of vegetable oils is increased by the development by the Indian government of a program worth 101 billion rupees ($ 1.2 billion), which is to increase the production of edible oils within 7 years from the current 12.7 million tons to 25.45 million tons, which will provide 72% of domestic needs of the country and will reduce dependence on imports.

December soybean futures on the Chicago Stock Exchange rose 6% last week, but fell 1.1% to $970/t on Friday (+8.6% on the month) amid profit-taking by traders and improvement soybean harvest prospects in Brazil and the USA.

Traders hope that a reduction in oil demand from India will be offset by an increase in demand from the world's second largest importer of vegetable oils, China, after the week-long holiday.