Malaysian palm oil futures jumped 3% on Friday, tracking a rally in crude oil and global markets, despite a sharp fall in March exports. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed up 68 ringgit, or 3.07%, at 2,284 ringgit per tonne, the highest daily increase in 12 days.
Palm traded flat for the week, as countries around the world imposed lockdown measures, shut down its borders, and placed restrictions on movements to contain the spread of the coronavirus.
Malaysia, the world's second-largest palm producer, will allow palm plantations to operate and vessels to enter the country during its two-week restricted movement to contain the virus, ensuring steady global supply of the vegetable oil.
However, a minimal workforce as ordered by the government may lead to a slowdown in the movement of goods in the supply chain, said Sathia Varqa, owner and co-founder of Singapore-based Palm Oil Analytics.
Malaysia's March 1-20 exports fell between 20-21% from the month before, cargo surveyors said on Friday.
"Crude palm oil is higher from a wave of rise in futures and equity markets, and not driven by fundamentals," Varqa said.
Dalian's most-active soyaoil contract gained 2.12%, while its palm oil contract dipped 0.17%. Soyaoil prices on the Chicago Board of Trade were up 2.32%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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