10/05/2010 (Bloomberg) - Palm oil futures advanced in Kuala Lumpur after crude oil snapped a four-day decline, boosting the appeal of edible oils used as biofuels.

July-delivery palm oil on the Malaysia Derivatives Exchange rose as much as 0.9 percent to 2,541 ringgit ($793) a metric ton, and ended the day at 2,529 ringgit. Futures climbed as crude jumped as much as 4.5 percent today, paring last week’s 13 percent plunge.

Crude oil is “rebounding” and that should support crude palm oil prices this week, said Arhnue Tan, senior analyst at ECM Libra Capital Sdn.

Palm oil, used mainly in food, has tracked crude prices for the past 13 weeks as it can be used as an alternative fuel source. It dropped alongside oil last week on concern the Greek debt crisis will spread across Europe and halt the global economic recovery.

Futures on the Dalian Commodity Exchange in China, the largest edible oils consumer, gained for the first time in three days, by as much as 1.5 percent to 6,806 yuan ($997) a ton.

A drop in palm oil stockpiles in Malaysia, the world’s second-largest producer, also helped support prices, said Fan Sha, an analyst at Tianfu Futures Co. Inventories fell 2 percent in April to 1.62 million tons, as output slid 5.8 percent to 1.3 million tons, a one-year low, according to data from the Malaysian Palm Oil Board released today.

The country’s exports last month fell less than expected. They dropped 8.2 percent to 1.28 million tons from a revised 1.39 million tons in March, the board said. The forecast by independent surveyors Societe Generale de Surveillance and Intertek was for 1.22 million tons and 1.18 million tons respectively.