Indonesian palm oil prices were mixed on Tuesday, despite gains in the Malaysian market, as recent price swings made many traders cautious. The state marketing centre in Jakarta sold crude palm oil at 10,445 rupiah ($1.14) a kg, an increase of 4 percent from 10,030 rupiah a kg on Monday, reflecting gains in Malaysian palm oil futures on Tuesday and good demand.
But in North Sumatra's Medan, producers sold crude palm oil at 10,070-10,220 rupiah a kg, down from last week's price of 10,515-10,555 rupiah a kg, as traders focused instead on the fact the Malaysian contract had fallen in previous days. Medan did not hold an auction on Monday.
"Malaysia did go up today but it's not enough to recover the losses in previous days," said a dealer in a plantation company in Medan, the country's key port for palm oil exports. "Also, players don't dare to take big positions. They want to wait for the market to stabilise," the dealer said.
Malaysian palm oil futures finished down 7.32 percent, or 293 ringgit, to end at 3,710 ringgit a tonne on March 7 the biggest one-day fall since April 1995 due to declining commodity markets and expectations of weakening demand from China.
On Tuesday, the benchmark May contract settled up 5 percent at 3,859 ringgit a tonne as buyers rushed back into the market in the wake of strong export data and an overnight jump in soyaoil and crude oil prices, traders said.
The contract ended up 173 ringgit, at 3,838 ringgit a tonne. Gains in Malaysia lifted the price of refined, bleached, deodorised (RBD) palm olein which was offered at 11,000 rupiah a kg, up from 10,500 rupiah a kg on Monday.
Some deals were made at between 10,700-10,800 rupiah a kg. "The local market is still slow because buyers are afraid there may be a correction in the price," one cooking oil dealer said.
On the export front, sellers offered crude palm oil for delivery in March at $1,200 a tonne, free on board Belawan. Buyers did not bid for the shipment. July to September delivery, sellers offered crude palm oil at $1,220 a tonne, free on board Belawan. Buyers bid at $1,185 a tonne but no deals were reported.
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