Palm oil climbs the most in 11 years after Tuesday’s sharp drop

JAKARTA: Malaysian palm oil futures rose more than 9% on Wednesday, their biggest intraday gain in 11 years, after declining sharply in the previous session on fears the fast-spreading coronavirus would curb demand from major importer China.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained as much as 9.1% in early trade, its most since Nov. 5, 2008, to 2,810 ringgit ($691.27) per tonne.

On Tuesday, palm oil prices dropped 10% in their biggest drop in over a decade.

“The drop because of coronavirus worries yesterday was overdone. Now, the market is doing some adjustment,“ said a Kuala Lumpur-based trader.

The death toll from the coronavirus outbreak in China rose to 132 with nearly 1,500 new cases.

Helping the gain in palm oil prices, soyoil on the Chicago Board of Trade climbed 0.9%, as investors took stock of the economic impact of the coronavirus. Palm oil is generally affected by price movements in related oils as its competes for a share in the global vegetable oil market.

Chicago soybean futures edged higher as the market took a breather after dropping to a more than one-month low earlier this week, although gains were capped by concerns over China’s demand.

Oil prices rose for a second day, standing on firmer ground after a five-day fall on talk OPEC could extend oil cuts if the new coronavirus hurts demand, while data showing a decline in U.S. stockpiles helped steady prices.

Asian shares erased earlier gains, swinging into negative territory as a spike in new Chinese virus cases sent Hong Kong stocks tumbling and fuelled fears about the economic impact of the outbreak.

U.S. stocks rebounded on Tuesday, as the S&P 500 bounced back from its worst day in nearly four months, led by a climb in Apple and other names hit by exposure concerns to the coronavirus outbreak in China that sparked a recent sell-off.

Risk currencies steadied on Wednesday as investors took stock of the economic damage from the outbreak of the coronavirus originating in China. -Reuters

source https://www.thesundaily.my/business/palm-oil-climbs-the-most-in-11-years-after-tuesday-s-sharp-drop-YH1944089