Indonesian palm oil prices softened on Monday because of increasing supplies and lack of buying power despite gains in neighbouring Malaysia. At the state marketing centre in Jakarta which sells crude palm oil from state plantations, the oil was traded at 8,075 rupiah ($0.866) a kilogram free on board Belawan, slightly down from 8,085 rupiah a kilogram on Friday.
Crude palm oil prices have surged more than 50 percent since early this year in line with gains in global prices which were boosted by strong demand from both the food and energy sectors.
In North Sumatra's Medan, producers have not held crude palm oil auctions since Friday. "Although Malaysia was up today, players didn't trade because they waited for prices to go down. Moreover, crude palm oil supplies were piling up," said a palm oil dealer in Medan, the key port for palm oil exports.
Malaysian crude palm futures rose 0.9 percent on Monday as financial players took up new positions after crude and rival soyaoil markets chalked up gains. The benchmark February contract rose 27 ringgit at 2,931 ringgit ($871) a tonne.
Losses in crude palm oil prices pushed down olein prices. In Jakarta, olein - palm oil based cooking oil - was offered at 7,775 rupiah a kilogram, slightly down from 7,800 rupiah a kilogram on Friday.
"There was no celebration, and buyers couldn't afford high prices," said a cooking oil dealer in Jakarta. On the export front, crude palm oil for November shipment was offered flat at $880 a tonne since Friday, free on board Belawan. But buyers did not make any bids for the shipment. Crude palm oil for December shipment was offered at $890 a tonne, up from $887.5 a tonne on Friday. Buyers bid at $870 a tonne.
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