Indian festival demand coincides with El Niño premium, providing double benefits for palm oil bulls

Golden Ten Data reported on June 26 that palm oil prices have risen, driven by increased Malaysian exports and expectations of higher demand from India, the largest buyer, ahead of festival season. The benchmark futures contract on the Malaysia Derivatives Exchange climbed to around 4,600 ringgit per ton (approximately $1,122), recovering some losses from earlier in the week. Data from Intertek Testing Services show Malaysia’s exports grew by 11% in the first 25 days of June compared to last month, with shipments to India increasing. Another inspection agency, AmspecAgri, reported a similar export growth rate. Aashish Acharya, Vice President of Patanjali Foods, one of India’s largest vegetable oil buyers, said Indian demand is expected to continue rising over the next four months, peaking before the Hindu Diwali festival in November. In the shorter term, demand from hotels and the food-service industry will also be boosted as restrictions on cooking gas, imposed during the Iran war, have been eased. Sathia Varqa, Senior Analyst at Fastmarkets Palm Oil Analytics, explained that strong export fundamentals combined with the premium from the El Niño weather pattern are supporting prices. Some buyers also purchased on dips after prices fell to the lowest point in over a week.