Palm oil rose to a 3-week high amid rising oil prices

2022-05-27 12:09:07
Machine translation
Palm oil rose to a 3-week high amid rising oil prices

World oil prices rose by 2.8-3% yesterday amid intensified hostilities in Ukraine and confidence in the European Union's embargo on Russian oil in 6 sanctions packages.

 

July futures for Brent oil yesterday rose 2.8% to the highest level since the end of March at $ 117.25 / barrel, and for WTI oil - by 3% to $ 114.5 / barrel.

 

Recall that in early March, Brent oil prices reached a maximum of $ 139.13 / barrel, but later declined amid active US action to increase supplies to the world market and increase the discount on Russian oil to $ 35 / barrel, so India and China began to buy cheap Russian oil. In April, India increased crude oil imports by 14.3% to 20.9 million tons, the highest figure in 3.5 years.

 

The oil quotes were supported by the statement of the Minister of Foreign Affairs of Saudi Arabia that the country can no longer restrain the oil market, ie will not increase production, as it is satisfied with high prices and profits.

 

Malaysian palm oil futures were the first to react to the change in oil prices, reaching a three-week high supported by active demand amid a shortage of supply from Indonesia, which continues to limit exports.

 

  • July palm oil futures in Malaysia yesterday rose 2.3% to 6533 ringgit / t or $ 1485 / t, adding 4.3% on Monday.

 

According to a trader from Kuala Lumpur, the benchmark contract fell after the start of trading following soybean oil prices, which fell amid forecasts of favorable weather and uncertainty in demand from China.

 

  • July soybean oil futures in Chicago yesterday rose 0.7% to $ 1,773 / t, falling back earlier in the week.

 

Covid's closure and drop in soybean oil demand in China will be temporary, as shortages of sunflower oil supply are tightening restrictions on palm oil supplies, which will increase demand for soybean oil.

 

Traders' hopes of resuming exports of Ukrainian sunflower oil from Black Sea ports have reduced sunflower oil prices from ports in Varna and Constanta. However, Russia continues to block ports, although it blames Ukraine.

 

Intensification of exports of unrefined oil and sunflower from Ukraine to the EU in April-May increased the supply of refined deodorized oil by European processors.

 

Demand prices for Ukrainian crude sunflower oil with delivery to Poland fell to 1450-1500 $ / t, to Romania and Bulgaria - to 1650-1700 $ / t. However, the volume of offers is declining against the background of rising delivery costs, which already reach 250-300 € / t, depending on the region.

 

Rising palm oil prices will soon support soybean and sunflower oil prices, especially given the resumption of activity in China after quarantine.

 

Imports of sunflower oil to China in April decreased by 71.7% compared to March to 13.6 thousand tons, and in general at the beginning of 2022 reached 219.6 thousand tons, which is 67.8% lower than the corresponding period last year.

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