KUALA LUMPUR: Malaysian palm oil futures rose about 5% to hit a near 12-week high on Wednesday, tracking strength in rival edible oils as supply disruptions in South America and Ukraine stoked concerns over global supply.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 203 ringgit, or 4.8%, to 4,436 ringgit ($936.06) a tonne by the midday break.
Palm edible oils rose for a third straight session, logging its highest price since Aug. 12.
Demonstrators protesting Brazil’s election results have disrupted fuel distribution, meat production, as well as the country’s ability to send grains and oilseeds to port, companies and authorities said on Tuesday.
In Ukraine, President Volodymyr Zelenskiy said the world must respond firmly to any Russian attempts to disrupt Ukraine’s grain export corridor, as more ships were loading despite Moscow suspending its participation in a UN-brokered deal.
Supply chain disruptions and weather risks in South America are likely to cause more volatility in the forward pricing, said Marcello Cultrera, director at commodities consultancy Apricus 8 Pte Ltd in Kuala Lumpur.
Palm rises over 4% after Russia pulls out of Black Sea export corridor
Dalian’s most-active soyoil contract rose 4.2%, while its palm oil contract gained 4.6%. Soyoil prices on the Chicago Board of Trade were up 1.5%.
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 extend its gains into a range of 4,368-4,459 ringgit a tonne, Reuters technical analyst Wang Tao said.