KUALA LUMPUR: Malaysian palm oil futures rallied more than 5% on Monday, recouping most of last session’s losses, as crude oil prices soared and surveys showed a slump in end-February stockpile.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange ended up 5.19% at 6,602 ringgit ($1,581.32) a tonne, after rising as much as 6.2%.

Palm oil production in the world’s top producers Indonesia and Malaysia is likely to rise about 3% this year, but it would not be enough to meet global edible oil demand, leading analyst James Fry told Reuters.

Oilseeds are seeing a tight situation with reductions in soybean and rapeseed crops in South America and Canada, while sun oil is struggling to maintain export pace following Russia’s invasion of Ukraine, Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group said.

“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 Bagani.

The invasion has halted Ukrainian sunflower oil shipments to the EU that usually are 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 fell 0.9%, while its palm oil contract eased 2%. Soyoil prices on the Chicago Board of Trade were up 2.4%. Oil prices spiked to their highest levels since 2008 as the United States and European allies weighed a Russian oil import ban and delays in the potential return of Iranian crude to global markets fuelled supply fears.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.