KUALA LUMPUR: Palm oil dropped, trimming yesterday’s biggest gain in six weeks, as Greek leaders failed to form a government, increasing speculation Europe’s debt crisis will worsen and cut demand for commodities.
July-delivery futures lost as much as 1.6% to 3,175 ringgit or US$1,019 a metric ton on the Malaysia Derivatives Exchange and were at 3,179 ringgit at the close of the morning session in Kuala Lumpur.
The most-active contract advanced 2.4% yesterday, the most since April 2, on speculation demand may increase before the Muslim fasting month of Ramadan.
Post-election attempts to form a government in Greece broke down yesterday as President Karolos Papoulias failed to broker a coalition in meetings with party leaders in Athens.
Greece will schedule new elections as early as June 10, which German Finance Minister Wolfgang Schaeuble called a referendum on whether the country stays in the euro.
"The market will wait for the political uncertainty to ease," Alan Lim Seong Chun, an analyst with Kenanga Investment Bank Bhd, said by phone today, May 16, 2012.
They’ll wait for Greece to have a government and see whether they will exit the euro and whether the new government is pro-austerity or growth.
Malaysian exports rose 0.7% to 599,044 tons in the first 15 days of May from 594,798 tons in the same period in April, surveyor Intertek said yesterday. Shipments fell 7% to 564,477 tons in the same period, estimated Societe Generale de Surveillance.
Palm oil for September delivery was little changed at 8,236 yuan or US$1,303 a ton on the Dalian Commodity Exchange. (Bloomberg/T03/TW)