Indonesian palm oil-based cooking oil prices rose 2.5 percent on Wednesday as Malaysian crude palm oil futures soared to a new record but the local crude palm oil market remained lacklustre with most traders still on holiday.
In Jakarta, the price of refined, bleached, deodorised (RBD) palm olein, which is used as cooking oil, rose to 8,050-8,100 rupiah ($0.855-$0.861) a kg, from 7,850-7,900 rupiah last week before the long holidays to celebrate Christmas and Eid-ul Azha.
"Generally, cooking oil sellers have to buy everyday but they are more aggressive when prices are rallying as they're afraid it may go up again tomorrow," said a cooking oil dealer in Jakarta. Malaysian crude palm oil futures surged to a record high on Wednesday, gaining close to 2 percent, as surging demand for food and fuel amid fears of falling production raised concerns about the supply outlook next year.
The benchmark March contract was up 48 ringgit by the midday break at 3,078 ($923) a tonne after hitting 3,080 ringgit. It surpassed the previous high of 3,068 ringgit hit in November.
The price of palm oil, used in products ranging from cosmetics and confectionaries to biodiesel, has risen more than 50 percent so far this year. While the cooking oil market was active, trading in the local crude palm oil market was lacklustre. The rally in the Malaysian market failed to stir trading interest as most traders were still away for the end-of-year holiday.
"Everybody is still in a holiday mood. They don't dare to take positions," said a dealer in Medan, the capital of North Sumatra province and home to Belawan port, the key port for palm oil exports.
Producers in Medan and the state marketing centre in Jakarta, which sells palm oil from state plantations, did not hold any auction. Indonesia's largest listed-plantation firm, PT Astra Agro Lestari, held an auction and sold all 8,250 tonnes of crude palm oil offered in the auction. It sold crude palm oil at between 8,125-8,415 rupiah a kg, up from 7,950 rupiah a kg on Friday. There was no price quotation for crude palm oil in the export market, reflecting a sluggish market.
Indonesia crude output seen slightly higher Indonesia's crude oil production is likely to rise to 837,600 barrels per day (bpd) in December from 823,000 bpd in November, an oil and gas watchdog official said on Wednesday.
Indonesia, Asia-Pacific's only Opec member, has been struggling to maintain output as the country has failed to tap new oil fields fast enough. "Some oil fields have produced a little bit higher in December but not much. Production is expected to be steady in January," the BPMIGAS official told Reuters.
The official said condensate production is seen at 125,700 bpd in December, compared with 126,400 bpd in November. Indonesia has been offering new exploration rights and financial incentives for oil fields in a bid to stem a steady decline in production. Indonesia became a net crude oil importer for the first time last year.
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