Flooding across Indonesia and Malaysia pushed third-month crude palm oil futures to close at a record high of 5,164 ringgit/t ($1,236/t) on the fob Bursa Malaysia exchange.
The monsoon season has curtailed output and exacerbated the ongoing supply-stifling effects of Malaysian labour
shortages and high fertilizer costs.
Foreign worker movement restrictions were implemented in 2020 to curb the spread of Covid-19, leaving a dearth of
harvesters on plantations ever since.
Kuala Lumpur approved the arrival 32,000 migrant workers to help plug the gap last year. But the workers have yet to arrive and the rapid spread of the Cocid-19 Omicron variant may delay their entry further. Even once they are able to work, training will be required and so it could be weeks or months before they are up to speed, a palm oil producer said. Palm oil production dropped by 5pc from 2020 levels to a five-year low of 18mn t last year as a result, according to the Malaysian Palm Oil Board.
The rainy season in southeast Asia should subside heading into February, but adverse weather is forecast to persist inSouth America, which could harm regional soybean crops and drive global vegetable oil prices even higher moving into the second quarter of 2022.