KUALA LUMPUR: Malaysian palm oil futures ended at a record high on Tuesday, as escalating Russia-Ukraine tensions deepened worries of a disruption in the supply of vegetable oils, grains and crude in the Black Sea region.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 170 ringgit, or 3%, to 5,845 ringgit ($1,396.99) a tonne at the close, up for a fourth straight session.
The spot contract hit a record high of 6,357 ringgit as investors also priced in tightening supply following an upsurge in early February exports.
Developments at the Ukraine border and good exports continue to bring short-covering in the palm oil contract despite higher production estimates, a Kuala Lumpur-based trader said.
Escalating tensions between Russia and Ukraine - two global crop heavyweights - are likely to force wheat, corn and sunflower oil buyers to seek alternative shipments, driving up world food prices already near multi-year highs, analysts and traders said.
Oil prices hit their highest since 2014 after Moscow ordered troops into two breakaway regions in eastern Ukraine, making palm a more attractive option for biodiesel feedstock.
In other oils, Dalian’s most-active soyoil contract rose 0.5%, while its palm oil contract jumped 2.9%. Soyoil prices on the Chicago Board of Trade were up 2.9%.
Adding support, exports of Malaysian palm oil products for Feb. 1-20 rose 30.5% from the same period in January, cargo surveyor Societe Generale de Surveillance said.
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