March 03, 2023 (MLN): The price of palm oil has surged due to concerns over supply caused by floods in Malaysia, according to Abdul Hameed, director of sales at Pakistan-based Manzoor Trading.
Heavy rainfall in Malaysia has disrupted production, leading to fears of a shortage of the commodity. Hameed believes that this, combined with the weaker ringgit against the dollar, could push the price of crude palm oil (CPO) futures toward MYR4,400 in the short term.
Furthermore, the lower-than-expected soybean crop in Argentina is also providing support for CPO futures prices, as the two crops are often used in similar products and tend to trade in tandem.
As of May delivery, the Bursa Malaysia Derivatives contract is MYR30 higher at MYR4,324 per ton. The higher prices for palm oil are expected to have a significant impact on the food and cosmetics industries, as palm oil is a key ingredient in many products.
This surge in prices may also have a knock-on effect on consumers, as companies may be forced to raise prices to compensate for the higher cost of production.
