KUALA LUMPUR: Malaysian palm oil futures jumped to a more-than-three-month peak on Thursday, underpinned by flooding woes, a weaker ringgit, and as traders assessed the impact of India’s removal of duty-free import quotas for sunflower oil.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange jumped 111 ringgit, or 2.65%, to 4,293 ringgit ($959.76) a tonne, its highest closing since Nov. 8.
More than 27,000 flood victims across Malaysia have been evacuated as months-long heavy rain continues to hit the country, state media Bernama reported.
Floods in Malaysia and Indonesia have created issues with the quality of crude palm oil and disrupted supply amid steady demand from key markets India and Europe, said Mitesh Saiya, trading manager at Mumbai-based firm Kantilal Laxmichand & Co.
“There are also worries about sunflower oil delivery from Ukraine as the Black Sea grains corridor is in trouble,” he added.
Russia on Wednesday said it would only agree to extend the Black Sea grain deal, which allows grain to be safely exported from Ukrainian ports, if the interests of its own agricultural producers are taken into account.
Palm oil falls over 2pc on slow pace of exports
Ukraine and Russia account for about 80% of global exports of sunflower oil.
Meanwhile, India on Wednesday said it will scrap a duty-free imports quota of 2 million tonnes of crude sunflower oil for the next fiscal starting April 1, as the world’s biggest importer of vegetable oils tries to support local oilseed farmers.
Dalian’s most-active soyoil contract gained 0.7%, while its palm oil contract rose 1.7%. Soyoil prices on the Chicago Board of Trade were down 0.2%.
The ringgit, palm’s currency of trade, fell 0.07% against the dollar, making the commodity cheaper for holders of the foreign currency.
Indonesia, the world’s biggest palm oil exporter, plans to require palm oil exports to go through a futures exchange to create the country’s own benchmark price, the head of its commodity futures regulator said.