Malaysian Palm Oil Council Russia's Post

VEGOILS-Palm futures rebound to gain 4% amid labour shortage

KUALA LUMPUR, July 14 (Reuters) - Malaysian palm oil futures rose nearly 4% early Thursday, rebounding from steep losses in the previous session, with production woes supporting sentiment after Indonesia stopped sending its workers to labour-starved estates in Malaysia.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange was up 133 ringgit, or 3.54%, at 3,894 ringgit ($877.03) a tonne, as of 0303 GMT.

Palm fell 8.6% in the previous session to a one-year closing low on expectations of weak July exports.

FUNDAMENTALS
Indonesia said on Wednesday it has temporarily stopped sending its citizens to work in Malaysia, including thousands recruited for the plantation sector, citing a breach in a worker recruitment deal signed between the two countries.

The plantation sector will be the worst affected by the freeze order as it is more reliant on Indonesian workers for harvesting activities in the estates — critical for the upcoming peak production months, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.

"The delay could lead to palm oil production for second half of 2022 falling below the level from a year ago," she added.

Dalian's most-active soyoil contract DBYcv1 rose 1.4%, while its palm oil contract DCPcv1 gained 1%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.3%.

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

Palm oil may test a support at 3,592 ringgit per tonne, a break below could open the way towards 3,284 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS
Asian shares struggled on Thursday and the safe-haven dollar was strong as white-hot U.S. inflation data drove fears the Federal Reserve will raise interest rates even more aggressively to slow price increases, potentially sending the economy into recession.
By: via Malaysian Palm Oil Council Russia