Malaysian palm oil futures recovered from a three-week low on Friday, driven by fears over sunflower oil supplies from the Black Sea region due to escalating tensions between Russia and Ukraine. The November delivery palm oil contract on the Bursa Malaysia Derivatives Exchange increased by 4 ringgit, or 0.1%, reaching 3,856 ringgit ($893.32) per metric ton.
The rise in palm oil prices was also supported by gains in soyoil, with the Dalian Exchange’s soyoil contract climbing 0.84% and the Chicago Board of Trade’s soyoil up 0.4%. The increase in soyoil prices provides a boost to palm oil as both oils vie for market share in the global vegetable oils sector.
Tensions between Russia and Ukraine intensified when Ukraine accused Russia of targeting a civilian grain vessel with strategic bombers in the Black Sea, raising concerns about supply disruptions. Additionally, a stronger Malaysian ringgit, which increased by 0.35% against the dollar, made palm oil less attractive to foreign buyers.
India’s palm oil imports in August decreased by over 25% compared to the previous month due to ample domestic stocks and negative margins. Meanwhile, rising crude oil prices, bolstered by disruptions in US Gulf of Mexico oil production from Hurricane Francine, have made palm oil a more appealing option for biodiesel feedstock.
