KUALA LUMPUR: Malaysian palm oil futures jumped more than 5% on Monday, lifted by a rally in crude and soyoil prices as Western nations stepped up sanctions against Russia over its invasion of Ukraine, fuelling prospects of tight global supplies.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 197 ringgit, or 3.3%, to 6,163 ringgit ($1,468.08) a tonne by 0332 GMT. Earlier in the session, the contract jumped 5.1% to hover near a record high scaled last week.
Fundamentals
Russian President Vladimir Putin put the country’s nuclear deterrent on high alert on Sunday in the face of a barrage of Western reprisals for his war on Ukraine, including blocking some Russian banks from the SWIFT international payments system.
Russian exports of all commodities from oil and metals to grains will be severely disrupted by Western sanctions, dealing a blow to Russia’s economy and hurting the West with a spike in prices and inflation, traders and analysts said.
Palm posts biggest daily rise in 13 years
Oil prices jumped more than $7 amid heightened Ukraine-Russia tensions, making palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract fell 1%, while its palm oil contract eased 1.6%. Soyoil prices on the Chicago Board of Trade were up 3.8%.
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 open much high on Monday, and start to drop thereafter, Reuters technical analyst Wang Tao said.
Source: Brecorder
