Malaysian palm oil futures scaled fresh record highs of 5,700 ringgit per tonne in early trade on Monday as global traders tried to factor in reduced supplies from top producer and exporter Indonesia.
Indonesian authorities shocked global edible oil markets last week by implementing a new rule that made it mandatory for palm oil producers to sell 20% of their output to domestic consumers at fixed prices.
The rule change has clouded the outlook for crude palm oil supplies from Indonesia, and upended global edible oil markets by making what is traditionally the cheapest vegetable oil the costliest among the three major edible oils traded across the world.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 0.96% to 5,680 ringgit ($1,355.34) per tonne in early trade.
- Reuters with additional editing by Sean OMeara