Indonesian palm oil prices rose on Wednesday, lifted by gains in Malaysia. In Jakarta, the state marketing centre sold crude palm oil at 9,210 rupiah ($0.991) a kilogram, from 9,136 rupiah a kilo on Monday.
The centre, which sells palm oil from state plantations, had an auction on Tuesday but rejected, bids from buyers as too low. "The price gained solely because of Malaysia," an official at the auction said. Producers in North Sumatra's Medan did not hold an auction.
Malaysia's crude palm oil futures rose 1.2 percent on Wednesday as more investors returned to the markets following gains in crude oil, traders said. The benchmark April contract rose 37 ringgit to 3,237 ringgit ($1,000) per tonne. It ended the day up 24 ringgit, at 3,200 ringgit a tonne. Palm oil prices are roughly 5 percent off their historic high of 3,420 ringgit a tonne, reached more than two weeks ago.
Gains in crude palm oil also lifted the price of refined, bleached, deodorised (RBD) palm olein, which is used as cooking oil. Cooking oil in Jakarta was traded at around 9,025 rupiah a kilogram, rising from 8,975 rupiah a kilo on Tuesday. The price excludes a 10 percent value-added tax. "The price rose because of Malaysia but it can't rise much because of the rupiah's strength against the dollar," said a dealer in a cooking oil refiner in Jakarta. Palm oil is priced in dollars, so a stronger rupiah makes the commodity cheaper for local buyers. The Indonesian rupiah steadied near 9,300 per dollar after briefly hitting a seven-week high of 9,280 per dollar.
The rupiah tracked gains in other Asian currencies, as the Federal Reserve is widely expected to cut interest rates later on Wednesday. "But the market is quiet as cooking oil is still too expensive for buyers. They need more money to buy olein now compared to a year ago," the dealer said.
In the export market, sellers offered crude palm oil for shipment in may at $1,010 a tonne. Buyers bid at $1,005 a tonne for the shipment but there were no deals reported.
Comments
Comments are closed.