VEGOILS-Palm gains over 2% on concerns over Black Sea edible oil supplies
20/07/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures jumped more than 2% on Thursday, as Russia's withdrawal from the Black Sea grain deal heightened concerns over edible oil supplies from the region.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange gained 105 ringgit, or 2.7%, to 4,000 ringgit ($879.60) a metric ton by the midday break, as trading resumed after a public holiday.
The contract tracked bullish momentum in competing markets amid escalating tensions between Russia and Ukraine, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Russia warned that from Thursday any ships sailing to Ukraine's Black Sea ports would be seen as potentially carrying military cargoes, as Kyiv accused Moscow of carrying out "hellish" overnight strikes that damaged grain export infrastructure.
"The tremors were felt across markets on Wednesday as Chicago soybeans and soy oil, ICE Canola and Euronext rapeseed futures jumped sharply," Bagani said.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Dalian's most-active soyoil contract DBYcv1 gained 1.5%, while its palm oil contract DCPcv1 rose 1.6%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.05%.
India's imports of sunflower oil are likely to fall in the coming months as it becomes uncompetitive against rival oils due to rising prices after Russia withdrew from the Black Sea grain deal, industry officials told Reuters.
Malaysia's palm oil exports during July 1-20 rose 19% from the month before to 754,214 metric tons, cargo surveyor Intertek Testing Services said.
Palm oil may retest a resistance at 3,949 ringgit per metric ton, a break above which could lead to a gain into the 3,978-3,995 ringgit range, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.5475 ringgit)
Source: Reuters