Crude palm oil rally taking a breather

THE crude palm oil (CPO) market entered a month of major volatility in light of the serious geopolitical uncertainty on a global level.

Palm oil production was already expected to be weak as the persistent Covid-19 situation caused supply chain concerns to be extended into the new year. The Russia-Ukraine conflict then pushed fears of supply uncertainty to a new level.

Russia and Ukraine are the top two producers of sunflower oil. They account for 80 per cent of global supply. Sunflower oil is the fourth most consumed edible oil, making up an estimated 10 per cent of the world's total edible oil consumption. The conflict has created a major disruption in edible oil markets, pushing traders to scramble for alternate supplies. Palm oil, the world's most consumed edible oil, was not spared in this chaos and saw its price soar quickly.