Palm oil hits RM6,000 a tonne following Ukraine crisis

 

Palm oil’s record-breaking run is fuelled by smaller output.

KUALA LUMPUR: Malaysia, a net exporter of crude oil and the world’s No. 2 palm oil producer, stands to benefit from the record-smashing gains in global commodity markets sparked by Russia’s invasion of Ukraine, say analysts.

While the conflict has pushed Brent oil past US$100 a barrel, palm oil topped RM6,000 a tonne for the first time ever today to extend a record-breaking run fuelled by smaller output.

MIDF Research reaffirmed bullish calls on the energy and plantation sectors, while the Kuala Lumpur-based TA Securities said a decline in local stocks would be a buying opportunity.

Malaysia’s main KLCI Index has risen more than 5% so far in February, poised for its best month since August, amid optimism over the nation’s wide vaccine coverage and plans to reopen its borders.

“The attack on Ukraine won’t derail the current economic and corporate earnings recovery,” in Malaysia, TA Securities said.

The firm asked clients to accumulate as the KLCI Index enjoys strong support at the 1,500 level. MIDF kept its end-2022 target unchanged at 1,700 points.

The gauge climbed 1.1% to 1,591.72 at the close, with the index of palm oil stocks ending near its highest level since January 2018.

Kuala Lumpur Kepong Bhd rose as much as 1.9%, while IOI Corp jumped as much as 4.2%.

Oil and gas services firms also climbed on Friday. Dialog Group Bhd gained 2.5%, Sapura Energy Bhd rallied 12.5%, Petronas Chemicals Group Bhd climbed 2.9%, and MISC Bhd increased 2.9%. - FMT