KUALA LUMPUR: Malaysian palm oil futures rallied as much as 6.3% on Friday, as Russia’s threats to pull out of an agreement on Black Sea grain exports and heavy rains in Malaysia raised concerns over global edible oil supply.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 169 ringgit, or 4.61%, to 3,834 ringgit ($815.74) a tonne.

For the week, palm was virtually unchanged.

Moscow has submitted concerns to the United Nations about an agreement on Black Sea grain exports, and is prepared to reject renewing the deal next month unless its demands are addressed, Russia’s Geneva U.N. ambassador told Reuters on Thursday.

This has sparked buying, as a cancellation of the agreement could affect Black Sea sunflower oil supply and create volatility in markets, Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.

“Monsoon season rains in Indonesia and Malaysia will put pressure on production, as we may see flooding from November to January, which may deteriorate the quality of crude palm oil,” he added.

Palm oil ends higher on widening discounts, weaker ringgit

Further supporting sentiment, Malaysia maintained its November export tax for crude palm oil at 8% and reduced its reference price to 3,575.80 ringgit ($760.81) per tonne for November.

Dalian’s most-active soyoil contract rose 2.1%, while its palm oil contract gained 2%. Soyoil prices on the Chicago Board of Trade rose 0.2%, extending gains for a third session.

Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.

The ringgit, palm’s currency of trade, fell 0.21% against the dollar, making the commodity cheaper for holders of foreign currency.