Malaysian palm oil futures rebounded to around MYR 6,600 a tonne, approaching their all-time high of MYR 7,108 amid tight market conditions and the Ukraine crisis.
The ongoing war in Ukraine has added to upside risks in the palm oil market, as sunflower oil exports from the Black Sea region are halted, boosting further demand for alternative palm oil.
On the supply side, the Malaysian Palm Oil Board estimated the country’s production in February fell 1.79% from the previous month.
while exports for Feb. 1-25 rose over 25.1% to 1,095,753 tonnes from 876,056 tonnes shipped during the same period of January. Given the above, Malaysia’s palm oil inventories at end-Feb likely plunged to their lowest in 10 months.
Also, Indonesia, the world’s top producer, started requiring producers to sell 20% of their planned exports to the domestic market in a bid to calm domestic prices.