Type something and hit enter



Palm oil slumps on demand destruction and food inflation worries

(March 4): Palm oil retreated on concerns about demand destruction from record high prices, although expectations of shrinking stockpiles in second-biggest grower Malaysia and escalating tension in the Black Sea region curbed losses.

Benchmark futures fell as much as 5.8% to RM6,415 a ton in Kuala Lumpur, before trading at RM6,412 by 11.29am local time. Prices, which hit an intraday record high of RM7,108 on Wednesday (March 2), are up 7.1% so far this week.

“After the current rally, which was premised on short covering, finally prices are trying to find a bottom that would eventually generate better buying interest,” said Paramalingam Supramaniam, director at Selangor-based broker Pelindung Bestari.

Still, palm oil’s fundamentals remain attractive with lower stockpiles and tighter edible oil availability worldwide, he said. The market will “eventually find its bottom and prices will consolidate and better reflect the supply and demand scenario.”

Inventories in Malaysia probably dropped to a 14-month low at the end of February as production slumped for a fourth straight month because of a chronic labour shortage, according to a Bloomberg survey.

Prices of cooking oils, used in thousands of products from chocolate to margarine and instant noodles, have skyrocketed as Russia’s invasion of Ukraine creates a void in the edible oil market, adding to food inflation risks.


Back to Top
Back to Top