Palm oil prices firm on supply concerns

Malaysian palm oil futures extended gains to above MYR6,400 ($1,457.4) per tonne in early June, trading not far from a record high of MYR7,268 ($1,655) hit on March 9 as consumption continues to outpace supply.

The production outlook in Malaysia continues to deteriorate amid a labor crunch while Indonesia has so far re-entered the export market only slowly, with export volumes at low levels.

Indonesia and Malaysia account for about 85 percent of the world’s supply of palm oil.

The Malaysian Palm Oil Council forecast Malaysia’s 2022 production at 18.6 million tonnes, below previous expectations, and after Indonesia has canceled a long-awaited plan to send a batch of workers to operate in labor-starved Malaysia’s palm oil plantations.

Palm oil prices are more than 35 percent higher this year as Russia’s invasion of Ukraine disrupted sunflower oil shipments and export restrictions in top producer Indonesia further squeezed global supplies.

This report’s information was first seen on TradingEconomics; to read more, click this link.