The Indonesian palm oil market was quiet on Friday as some palm oil producers were closed for a four-day holiday, but traders expect prices to be higher next week in line with a bullish Malaysian market. Concerns about a possible increase in palm oil export taxes as the government tries to lower local cooking oil price also dampened trading interest.
Indonesian markets have been closed since on Thursday for a four-day national holiday. The state marketing centre in Jakarta, which sells crude palm oil from state plantations, will resume auctions on Monday.
There were no auctions in North Sumatra's Median, the key port for palm oil exports, with some palm oil producers closed for holidays. "It's very quiet today. Some palm oil producers have their headquarters in Jakarta and are closed for holidays. But next week prices may be higher as Malaysia has been gaining in past days," said a trader in Median.
Malaysia crude palm oil futures rose 1.2 percent on midday Friday, lifted by strong prices of rival soyaoil and expectations of a steady increase in exports this month.
But traders expect demand to remain slow as refiners are reducing purchases of crude palm olein in line with government instructions to lower local cooking oil prices. Cooking oil producers in Jakarta sold olein at 6,100 rupiah a kilogram, unchanged from Wednesday in line with the government's instruction.
But cooking oil outside the government's set price was sold at around 7,350 rupiah a kilogram in Jakarta and 7,150 rupiah a kilogram in Medan said another trader in Medan.
The government has said it may increase the export duty for palm oil products if the current programme fails to lower cooking oil prices to a range of 6,500 rupiah to 6,800 rupiah. Cooking oil is a staple and any rise in its price is politically sensitive. Crude palm oil producers have committed to releasing up to 150,000 tonnes of cooking oil to the market to ease the soaring retail prices.
Crude palm oil is currently subject to a 1.5- percent export tax while other palm oil products, including cooking oil, are subject to a 0.3 percent export tax.
Comments
Comments are closed.