Palm oil faces short-term pressure but remains structurally tight in the long term; mild export growth cannot offset the drag from abundant supply

⑴ Despite renewed escalation of geopolitical tensions in the Middle East, the current ample supply of palm oil is putting downward pressure on prices, with short-term market sentiment constrained by the plentiful spot fundamentals. ⑵ According to freight inspection agency data, Malaysia's palm oil exports in the first half of July increased by about 4% compared to the previous period, showing a mild recovery in export demand, though this has failed to effectively lift market prices. ⑶ The Malaysian Derivatives Exchange's September delivery contract closed slightly lower at 4,569 ringgit per ton, indicating a general trend of narrow consolidation in the market. ⑷ Looking into the medium to long term, agencies warn that a strong El Niño could become a significant variable, with potential weather disturbances possibly tightening future supplies and providing support expectations for forward prices. ⑸ Currently, bullish and bearish factors are intertwined, with short-term abundant supply coexisting with medium and long-term production reduction concerns. The market should continue to monitor weather developments in production areas and the pace of export demand to determine future price direction.