New Delhi, March 3 Possible short supply of sunflower oil amid the ongoing Russia-Ukraine has led the crude palm oil prices going through the roof.
Escalated geo-political worries in the Black Sea region may have significant bearing on sunflower seed and the oil supply from the region.
India is the major importer of crude palm oil and the country meets more than two-thirds of its edible oil needs through imports, of which palm oil accounts for more than 60 per cent.
All edible oils track each other's prices as they compete in the market, and any potential supply disruptions for one buoys the prices of the other counters.
Since the past one-month Malaysian crude palm oil, the benchmark, has risen about 25 per cent. On Wednesday, it hit an all-time high of 7,108 ringgits (equivalent to Rs 1,28,819) per tonne.
At the time of writing this report, the May delivery of Malaysian crude palm oil futures was at 6,901 ringgits.
"Disruption in Ukrainian sunflower oil supply is expected to persist sometime," said Vinod T.P., an analyst at Geojit Financial Services.
The near-term resistance is seen at 7,250 ringgits, while the support at around 6,250 ringgits.
"The current rally in palm oil prices is also triggered due to panic buying, and positive news from the war front may correct its prices significantly," Vinod said.
According to Mohit Vyas, an analyst at Kotak Securities: "Depleting palm oil stocks in world's largest two palm oil producing countries (Indonesia and Malaysia), lower soybean crop worries from South American countries and reduced import duty by India may help palm oil prices maintain range-bound with positive bias momentum for near future."
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