Indonesian crude palm oil prices rose 0.7 percent to a record high of 7,928 rupiah ($0.868) a kg on Monday, boosted by gains in Malaysian crude palm oil futures. The state marketing centre, which sells palm oil from state plantations, sold crude palm oil at 7,870 rupiah a kg on Friday.
"Prices rose because crude oil has been gaining, which eventually boosted Malaysian palm oil futures," said Azis Kahar, the centre's head of the palm oil marketing unit. Indonesia's crude palm oil prices, which have hit a new high for the fourth time in the past three weeks, have gained nearly 50 percent since the start of the week on robust demand from both the food and energy sector.
News about Indonesia's palm oil tax rates, which are adjusted monthly, as well as gains in crude oil and soyoil markets have constantly pushed Malaysian palm oil prices. Malaysian crude palm oil futures yielded little ground on Monday without any positive leads to push the market past the 3,000 ringgit level.
The benchmark January contract inched up 8 ringgit at 2,925 ringgit ($875) a tonne by the midday break, off its fifth record high at 2,959 ringgit a tonne struck last week. It closed up 13 ringgit at 2,930 ringgit a tonne.
Oil prices hit a record at $96.24 last week as investors were worried partly because of tensions in the Middle East. US light crude for December delivery stood at $94.28 a barrel at 1055 GMT on Monday.
Crude palm oil now closely track crude oil movements due to its increasing use as alternative energy. But record-high prices did not stir producers in North Sumatra's Medan, the key port for palm oil exports to hold palm oil auction. "The market is not active today. We don't see any offers. I think players are waiting for new leads tomorrow," said a dealer in Medan.
Lacklustre trading also reigned in the cooking oil market due to slow demand, defying gains in crude palm oil. Prices of refined, bleached, deodorised (RBD) palm olein, used as cooking oil, were unchanged from Friday at 7,650 rupiah a kg.
"We don't seen much interest in buying olein," said a cooking oil dealer in Jakarta. The prices excluded a 10-percent value-added Tax. At the export market, sellers offered crude palm oil for November shipment at $877.5 a tonne, free on board Belawan. Buyers bid at $870 a tonne but there were no reports of deals at this price level.
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