KUALA LUMPUR: Palm oil rebounded from the biggest drop in more than 14 months as the slump, driven by concern that Europe’s debt crisis will worsen with the possible exit of Greece from the euro region, prompted buying from consumers.
August-delivery futures gained as much as 2% to 3,146 ringgit ($1,012) a metric ton on the Malaysia Derivatives Exchange, and were at 3,133 ringgit at 12:16 p.m. in Kuala Lumpur.
The most-active contract yesterday plunged 4.1%, the biggest drop since Feb. 23, 2011, and closed at 3,093 ringgit, the lowest settlement price since Feb. 3. Palm oil’s so-called 14-day relative-strength index reached 25.88 yesterday, below the level of 30 that may indicate a rebound.
Concern about Europe’s crisis drove the Standard & Poor’s GSCI Spot Index of raw materials yesterday to the lowest level since Dec. 20.
The index rose as much as 0.2% today. The European Central Bank said yesterday it will temporarily stop lending to some Greek banks to limit its risk as President Mario Draghi signaled the ECB won’t compromise on key principles to keep Greece in the euro area.
"Palm oil is following the recovery in commodities," Donny Khor, senior vice president for futures and options at OSK Holdings Bhd., said by phone from Kuala Lumpur. "The market continues to be weighed down by Europe."
Malaysian palm oil exports rose 0.7% to 599,044 tons in the first 15 days of May from the same period in April, Intertek said May 15. Shipments fell 7% to 564,477 tons in the period, estimated Societe Generale de Surveillance.
Palm oil for September delivery gained 0.2% to 8,130 yuan ($1,286) a ton on the Dalian Commodity Exchange. Soybean oil for the same month rose 0.6% to 9,282 yuan. (Bloomberg/T07/TW)