Investors have stampeded into China’s edible oil markets, drawn by the volatility caused by the nation-wide outbreak of African swine fever that curbed oilseed crushing, slashed pork output and forced food courts and restaurants to change up menus, reported Reuters.
Open interest in Dalian Commodity Exchange soybean oil and palm oil futures hit a record this week, while traded volumes in the markets scaled multi-year highs. Prices for both commodities climbed to their highest since mid-2018.
“Soyoil and palm are getting a lot of interest. Fundamentally, since soybean crushing is slow due to (African swine fever), there isn’t much soyoil and that’s driving up prices for soyoil and palm oil,” said Darin Friedrichs, senior commodity analyst in Asia at brokerage INTL FCStone. “But now it’s gotten very volatile and there’s a lot of speculative trading.”