April 24 (Bloomberg) -- Palm oil advanced, reversing a drop to near the lowest level in more than four months, on speculation that the slump will spur increased buying interest for the most-used edible oil.
The contract for July delivery rose 0.8 percent to close at 2,290 ringgit ($751) a metric ton on the Bursa Malaysia Derivatives. Most-active prices, which fell to 2,260 ringgit earlier today, touched 2,250 ringgit on April 22, the cheapest since Dec. 14.
Futures have lost 6.1 percent this year, extending a drop from 2012, as demand slowed and investors sold commodities amid concern that the global recovery may lose momentum. The Malaysian currency has gained 1.5 percent against the dollar this month, reducing the appeal of ringgit-denominated contracts. China and India are the largest palm oil buyers.
“At these levels, there’s some bargain-hunting interest,” said Gnanasekar Thiagarajan, a Mumbai-based director at Commtrendz Risk Management Services Pvt. Ltd. “Whenever prices fall, at all these dips there will be physical buying interest. You can’t wait for it to bottom out, so these physical buyers will continue to buy on every fall.”
Soybean oil for July delivery gained 0.3 percent to 48.56 cents a pound on the Chicago Board of Trade, while soybeans were little changed at $13.60 a bushel.
Refined palm oil for September delivery retreated 1.4 percent to end at 5,936 yuan ($961) a ton on the Dalian Commodity Exchange, the lowest price at close for the most-active contract since October 2009. Soybean oil fell 1.3 percent to 7,316 yuan a ton, the lowest close since February 2010.
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