JAKARTA: Malaysian palm oil futures rebounded on Wednesday, as global commodity prices rallied further on supply concerns fuelled by Russia’s invasion of Ukraine.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 1.20% to 6,493 ringgit ($1,553.35) per tonne by midday break, after declining more than 3% a day earlier on some profit-taking.
Palm was supported by Dalian and soybean oil that nudged higher, while US crude oil prices remained above $120, a trader in Kuala Lumpur said.
High palm prices are “here to stay unless war ends” or Indonesia, the world’s top palm oil producer, eases export curbs aimed at controlling domestic prices, the trader added.
Oil prices extended their rally on Wednesday as the US ban on Russian oil imports and Britain’s plan to phase them out by year-end raised concerns of tighter global supply.
Meanwhile, Dalian’s most-active soyoil contract rose 0.82%, while its palm oil contract gained 1.53%. Soyoil prices on the Chicago Board of Trade were up 0.18%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The Russia-Ukraine war has halted Ukrainian sunflower oil shipments to the EU that usually represent around 200,000 tonnes per month, vegetable oil industry group FEDIOL said.
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