KUALA LUMPUR: Malaysian palm oil futures climbed for a second straight day on Tuesday, on concerns over global edible oil supplies after Russia suspended its participation in a Black Sea export agreement.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 190 ringgit, or 4.69%, to 4,244 ringgit ($897.06) a tonne by the midday break.
Grain was flowing out of Ukraine at a record pace on Monday under an initiative led by the United Nations aimed at easing global food shortages despite Russia warning it was risky to continue after it pulled out of the pact.
Sunflower oil shipments from the Black Sea region have been hampered by the Russia-Ukraine conflict and could be further disrupted by Russia’s withdrawal from the Black Sea pact.
Indonesia has extended until the end of this year its policy of waiving a palm oil export levy, unless the palm oil reference price breaks $800 per tonnes, the economic ministry said on Monday.
Palm rises over 4% after Russia pulls out of Black Sea export corridor
“Malaysian crude palm oil will be attractive for the export markets; however, demand for refined products will pivot lower due to cheaper values from Indonesia,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Dalian’s most active soyoil contract rose 1.7%, while its palm oil contract jumped 4.1%.
Soyoil prices on the Chicago Board of Trade were up 0.6%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may retest a support of 4,007 ringgit a tonne, a break below which could open the way towards the 3,850-3,929-ringgit range, Reuters technical analyst Wang Tao said.