Malaysian Palm Oil Council Russia's Post

VEGOILS-Palm oil scales fresh record highs on reduced Indonesia supply outlook

SINGAPORE, Jan 31 (Reuters) - Malaysian palm oil futures scaled fresh record highs of 5,700 ringgit per tonne in early trade on Monday as global traders tried to factor in reduced supplies from top producer and exporter Indonesia.

Indonesian authorities shocked global edible oil markets last week by implementing a new rule that made it mandatory for palm oil producers to sell 20% of their output to domestic consumers at fixed prices.

The rule change has clouded the outlook for crude palm oil supplies from Indonesia, and upended global edible oil markets by making what is traditionally the cheapest vegetable oil the costliest among the three major edible oils traded across the world.

The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange gained 0.96% to 5,680 ringgit ($1,355.34) per tonne in early trade.

FUNDAMENTALS
Indonesia, the world's biggest palm oil producer and exporter, has set the crude palm oil reference price for February at $1,314.78 per tonne, up from January's 1,307.76 per tonne, the Trade Ministry said in a statement on Friday.

India, the top edible oil importer, is likely to set aside about 3 trillion rupees ($40 billion) on food and fertiliser subsidies in its budget next week for 2022/23, officials said, roughly the same amount the government budgeted for this fiscal year ending in March.

Chicago March 2022 soybean futures stretched to fresh life-of-contract highs in early trade Monday to extend their run higher on worries about the scale of drought-hit crops from South America.

Chicago's most-active soyoil contract BOcv1 rose 2.11% to 66.66 cents a pound, its highest level since June 2021 at 02:45 GMT. Soymeal futures were up 1.3% at $416.70 a short ton.

China's main commodity futures markets will be closed until Feb. 7 due to the Spring Festival holiday.

Palm oil FCPOc3 may test a resistance at 5,676 ringgit per tonne, a break above which could lead to a gain into the 5,749-5,794 ringgit range.

GLOBAL MARKETS
Asian share markets made a cautious start to a week that is likely to see a rise in UK interest rates and mixed reports on U.S. jobs and manufacturing, while surging oil prices added to worries over inflation.

Oil rose 1% on Monday, hovering near 7-year highs hit in the previous session, amid concerns over tight supply as well as geopolitical tensions in Eastern Europe and the Middle East.
By: via Malaysian Palm Oil Council Russia