KUALA LUMPUR (Feb 24): Like other commodities, crude palm oil (CPO) prices jumped past RM7,000 a tonne for the first time following news that Russia had launched an invasion of Ukraine.
At the close (6pm), the one month March futures contract increased RM587 to RM7,093 a tonne. Meanwhile, CPO futures contracts for April 2022 rose RM533 to settle at RM6,786 a tonne, whereas the benchmark May 2022 contracts went up RM476 to close at RM6,458.
Crude oil prices topped US$100 (about RM420.10) a barrel for the first time since 2014. Meanwhile, three-month aluminium on the London Metal Exchange hit a record high of US$3,449 a tonne, and was up 4.3% at US$3,437 by 11.10 GMT. Russia is one of the largest aluminium producers.
When contacted, Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the force driving CPO price is investors and speculators bidding on CPO contracts amid tight supply.
“As the tight supply for CPO is expected to remain, short-to-mid term buying interest will remain. Hence, this is positive to the plantation sector,” he told The Edge when contacted.
Nevertheless, he said that there is a speculative element in current rally on the CPO price, hence high CPO prices will not be sustainable in the long run.