MUMBAI: Malaysian palm oil futures rose in early trade on Friday from their lowest level in three weeks, due to concerns over sunflower oil supplies from the top-producing Black Sea region, following escalating tensions between Russia and Ukraine.
Malaysian palm oil hits three-week low
Palm oil also gained support from a rise in rival soyoil.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 4 ringgit, or 0.1%, at 3,856 ringgit ($893.32) a metric ton.
Fundamentals
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Ukraine accused Russia on Thursday of using strategic bombers to strike a civilian grain vessel in a missile attack in Black Sea waters near NATO member Romania, escalating tensions between Moscow and the military alliance.
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Dalian’s most-active soyoil contract rose 0.84%, while its palm oil contract was up 0.28%. The Chicago Board of Trade soyoil edged up 0.4%.
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Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market.
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The Malaysian ringgit, palm’s currency of trade, rose 0.35% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.
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India’s palm oil imports in August fell more than a quarter from a month ago, primarily driven by sufficient domestic stocks and negative margins that discouraged refiners from purchasing more of the tropical oil.
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Oil prices rose on Friday, extending a rally sparked by output disruptions in the US Gulf of Mexico, where Hurricane Francine forced producers to evacuate platforms before it hit the coast of Louisiana.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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