Palm oil slumped the most in more than 14 months as concern that Europe’s debt crisis will worsen with the possible exit of Greece from the euro zone cut demand for commodities. Volume was a record 63,019 contracts.
July-delivery futures fell 4.1 percent, the biggest drop for the most-active price since Feb. 23, 2011, to close at 3,093 ringgit ($992) a metric ton on the Malaysia Derivatives Exchange. That’s the lowest settlement price since Feb. 3. Futures are on course for the first monthly drop since January. Volume topped the previous high of 48,741 contracts on Nov. 17.
Post-election attempts to form a government in Greece broke down yesterday as President Karolos Papoulias failed to broker a coalition. 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 at Kenanga Investment Bank Bhd., said by phone today. Investors will “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.”
The Standard & Poor’s GSCI Spot Index of raw materials dropped to the lowest level since Dec. 20 as crude oil and soybeans declined. Commodities may extend their retreat, BHP Billiton Ltd., the world’s biggest mining company, said today.
“External factors are dominating the market,” Vijay Mehta, a director at Commodity Links Pte., said from Singapore. “Fundamentals are not playing any game right now, so we just have to watch and see how this outside market stabilizes.”
Malaysian palm oil exports rose 0.7 percent to 599,044 tons in the first 15 days of May from the same period in April, Intertek said yesterday. Shipments fell 7 percent to 564,477 tons in the period, estimated Societe Generale de Surveillance.
Soybeans for July delivery lost 1.3 percent to $13.9425 a bushel on the Chicago Board of Trade. Soybean oil for the same month fell 1.7 percent to 50.61 cents a pound. Palm oil and soybean oil are both used in foods.
Palm oil for September delivery retreated 1.4 percent to close at 8,118 yuan ($1,284) a ton on the Dalian Commodity Exchange, the lowest close for a most-active contract since Feb. 3. Soybean oil for the same month lost 1.4 percent to 9,230 yuan.