By Mei Mei Chu
KUALA LUMPUR, March 7 (Reuters) – Malaysian palm oil futures rose on Monday, rebounding from previous session’s sharp losses, as oil prices soared and surveys showed a slump in end-February stockpile.
The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange was up 169 ringgit, or 2.69%, at 6,445 ringgit ($1,543.34) a tonne by the midday break.
The contract had jumped up to 4.7% at the opening bell.
“Palm oil prices are in general seen trading at a record high level this month and a downside correction from these levels is most likely given the disruption of demand from destination markets,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Oilseeds are seeing a tight situation with reductions in soybean and rapeseed crops at South America and Canada, while sun oil is struggling to maintain export pace amid Russia’s invasion of Ukraine, he said.
The invasion has halted Ukrainian sunflower oil shipments to the EU that usually represent around 200,000 tonnes per month, vegetable oil industry group FEDIOL said on Friday, adding that the EU was facing a shortfall.
Malaysia’s palm oil stockpile at end-February likely plunged 11.4% from the prior month to 1.38 million tonnes, its lowest in over 10 months, as production shrank for a fourth consecutive month while exports jumped, a Reuters survey showed on Friday.
Dalian’s most-active soyoil contract DBYcv1 fell 1.2%, while its palm oil contract DCPcv1 eased 2%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 2%.
Oil prices soared more than 6%, touching their highest since 2008 after the United States and European allies mull a Russian oil import ban while delays in the potential return of Iranian crude to global markets fuelled tight supply fears. O/R
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
($1 = 4.1760 ringgit)
(Reporting by Mei Mei Chu; Editing by Subhranshu Sahu)