Palm advanced the most in almost two weeks on speculation that an increase in crude oil prices to the highest level in more than a month will boost demand for the tropical oil in biodiesel as production declines in Indonesia.
Palm oil fell for a third day to the lowest in a week on speculation that stockpiles in Malaysia, the world’s second-biggest producer, may rise after surveyor estimates showed that exports declined last month.
The commodity slump that spurred bear markets in everything from gold to corn to sugar this year will deepen by the end of December as prices head for their first annual loss since 2008, if history is any guide.
Palm, the world’s most used cooking oil, is set to extend a bull market rally as output drops in Indonesia and biofuel mandates expand globally, said Dorab Mistry, director at Godrej International Ltd.
Palm oil dropped for a third day on speculation that output in Malaysia, the world’s second-biggest producer, may climb for a ninth month and a decline in soybean oil prices may spur consumers to switch to the alternative oil.