KUALA LUMPUR: Malaysian palm oil futures jumped to a record high on Tuesday, as the shutting of Ukrainian ports following Russia's invasion disrupted supply and raised prospects of demand from the Black Sea shifting to the tropical oil.
Ports in Ukraine will remain closed until the invasion ends, the head of Ukraine's Maritime Administration said, adding that the port of Mariupol has sustained damage from Russian shelling.
The Black Sea accounts for 60% of world sunflower oil output and 76% of exports.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 206 ringgit, or 3.27%, to 6,505 ringgit ($1,551.40) by the midday break, rising for a eighth in nine sessions.
The spot contract soared 4% to a record 7,750 ringgit ($1,848.32).
Russia's invasion of Ukraine is also expected to halt the processing and export of Ukrainian oilseed crops for at least one month, curbing flows of sunflower seed to the European Union, consultancy Strategie Grains said.
Palm prices rallied banking on higher export prospects after Black Sea shipping route was closed, Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
"Palm is expected to make-up for the shortfall, but palm is running on a very tight supply and peak production is months away," Varqa said.
Dalian's most-active soyoil contract vaulted 4.7%, while its palm oil contract gained 4.4%. Soyoil prices on the Chicago Board of Trade were up 2.6%.
Rise in related edible oil prices triggered by Black Sea disruption will sustain palm prices until there is some sort of settlement to the Russia-Ukraine crisis, Varqa added.
Malaysia's palm oil exports in February rose between 7.2% and 9.6% from January, cargo surveyors said on Monday.
Palm oil may retest a resistance at 6,488 ringgit per tonne, a break above which could lead to a gain to 6,562 ringgit, Reuters technical analyst Wang Tao said.
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