Palm oil prices remained largely stable in July, both on Bursa Malaysia and the Rotterdam market. The picture, however, continues to be affected by conflicting signals regarding availability, demand, and weather risk.
In Malaysia, June production increased 8% from May, reaching 1,64 million tonnes. Inventories rose to 2,54 million tonnes, 25% higher than in the same month of 2025.
The situation appears less abundant in Indonesia. In May, inventories were 22% lower than the three-year average. Over the same period, exports decreased by 32% year-on-year, while domestic consumption grew by 2%.
International demand also shows mixed trends. Chinese imports in June decreased by 46% compared to 2025, despite maintaining a 16% increase overall in the first half of the year. In the European Union, cumulative purchases in July were 20% lower than the average of the last three marketing years and 1% lower year-on-year.
The main source of uncertainty comes from the climate. Forecasts indicate a 97% probability that El Niño will persist until early spring 2027 and an 81% probability that it will reach very high intensity between October and December. This development could impact the productivity of plantations in Indonesia and Malaysia.
Regarding rice, Ente Risi's update for the 2026/27 Italian rice growing season estimates a total area of 233.500 hectares, down 0,5% from 2025 and 0,2% from the survey published in February.
However, the reduction is not uniform across the various types. The areas dedicated to Long A and Medium A fell overall to 116.100 hectares, a decrease of 11,8% year-over-year. Within the segment, Long A fell by 7,9%, while Medium A recorded a much more significant decline, equal to 47,5%.
The Lungo B area also decreased by 13,9%, reaching 39.850 hectares. The Tondo area bucked the trend, reaching 77.550 hectares and growing by 36,5% compared to 2025.
The revision therefore confirms a significant shift in planting intentions toward Tondo. However, Areté forecasts an overall reduction in acreage of 1,6% for 2026, a sharper decline than Ente Risi's estimate.
