KUALA LUMPUR: Palm oil is the latest product to be swept up in the global commodity rally, deepening concerns about food inflation that’s already at the highest in seven years.
The world’s most consumed edible oil, used in everything from chocolate to lipstick and soap, saw the third-month contract surge by RM174 to RM4,524 a tonne at 12.30pm on Wednesday, in Kuala Lumpur. This was the highest level on record.
Prices of everything from soybeans to wheat, corn and vegetable oils have soared at a time when industrial commodities have been climbing too, threatening to rekindle global inflation and spur increases in interest rates.
The jump in the prices followed a rally in farm commodity prices overnight when soybeans burst through US$16 a bushel and soybean oil, a direct rival of palm, climbed to the highest level since 2008.
Farm crop prices have been rising because of weather damage to crops and booming demand from China.
“The relentless rise in the edible oil complex propelled crude palm oil futures to fresh highs, ” said Sathia Varqa, owner of Palm Oil Analytics in Singapore.
The surge in palm and soybean oil on Dalian and Chicago markets during Asia trading hours, as well as strong crude oil prices are supporting palm before the holiday, he said.
The market has now closed and only reopens on Monday in a holiday for the Eid-al-Fitr. - Bloomberg