Palm rises as worries over edible oil supply linger

Malaysian palm oil futures rose on Monday tracking strength in other edible oils on China’s Dalian exchange, supported by lingering concerns over tightening global supplies amid the Russia-Ukraine conflict.

The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange gained 0.73%, to 6,366 ringgit ($1,500.35) a tonne during early trade.

The contract posted a 9% weekly gain last week.

 Exports of Malaysian palm oil products for April 1-15 fell between 14% and 23% from the same period in March, cargo surveyors said.

 Italian confectionery giant Ferrero will stop sourcing palm oil from Sime Darby Plantation SIPL.KL after the U.S. customs service found the Malaysian planter used forced labour, in a reputational blow for the palm producer and Malaysia.

Dalian’s most-active soyoil contract DBYv1 rose 0.13%, while its palm oil contract DCPv1 gained 1.85%. Soyoil prices on the Chicago Board of Trade BOc2 were up 0.87%.

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 test a resistance at 6,548 ringgit a tonne, a break above could lead to a gain into the 6,664-6,686 ringgit range, Wang Tao, Reuters technical analyst said.

Oil prices rose as concerns grew about tighter global supply, with the deepening crisis in Ukraine raising the prospect of heavier sanctions by the West on top exporter Russia.

Stronger crude makes palm a more attractive option for biodiesel feedstock.

U.S. grains futures gained in early Asian trade, with corn hitting nearly a decade high, supported by tightening global supplies and a production outlook clouded by the Russia-Ukraine war.

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Tags: palm oil, futures, supplies, contract, Dalian exchange, palm oil products, Malaysia, soyoil