Indonesian palm oil drops

Indonesian palm oil prices eased on Friday, tracking a tumble in Malaysia, amid market talk that Indonesia was likely to delay its plan to raise cooking oil export tax.
In the state marketing centre, which sells crude palm oil from state plantations in Jakarta, crude palm oil was traded at 7,551 rupiah ($0.832) a kilogram, 0.9 percent down from 7,626 rupiah on Thursday.
There was no auction in North Sumatra's Medan, the leading port for palm oil export. "There is no auction here, traders retreat from the market as prices are falling," said a trader in Medan adding players were on the sidelines awaiting fresh direction. Malaysian palm futures fell more than 4 percent on Friday, hit by speculation Indonesia will delay its plan to raise the cooking oil export tax.
On Thursday, Trade Minister Mari Pignuts said that Indonesia was planning to impose a 6.5 percent export tax on crude palm oil to discourage exports and increase supply to domestic markets at lower prices by end June. The government has said raising the export tax in one of the options being considered to try to lower cooking oil prices, which have surged nearly 30 percent since this year.
In Jakarta, cooking oil was offered at 8,200 rupiah a kilogram, down from 8,350 on Thursday.
Prices has stayed high despite the government extending a voluntary programme to stabilise domestic cooking oil prices, which has been in place since early May.
Under the programme, producers should supply crude palm oil to cooking oil processors at lower prices so that non-branded cooking oil in the retail market, which is widely consumed by low-to middle income brackets, can be sold at 6,500-6,800 rupiah a kilogram.
Trade Minister Pignuts said on Friday the government was considering raising the export tax for other palm oil by-products but had not decided by how much.
Industry Minister Farm Iris said the government has proposed increasing the export tax for 7 palm oil by-products including stern and Palm Fatty Acid Distillate (PFAD) which is the main source for bodiless. At present, only five palm oil products are subject to an export tax. Crude palm oil is subject to a 1.5- percent exported while other by-products are subject to a 0.3 percent export tax.
In the Indonesian export market, sellers offered crude palm oil for June shipment at $800 a tonne, 3 percent down from $825 a tonne on Thursday. But buyers did not bid for the shipment.
July shipments were offered at $780, off 3.7 percent from $810 a tonne on Thursday, without any bids from buyers.