Indonesian palm oil prices fell on Friday, dragged down by losses in the Malaysian market with traders still cautious due to concerns of a possible higher export tax next month. The state marketing centre in Jakarta sold crude palm oil at 10,083 rupiah ($1.09) a kg, down 4.2 percent from 10,528 rupiah a kg on Wednesday.
The centre, which sells palm oil from state plantations, failed to sell crude palm oil that was offered at Thursday's auction. Producers in North Sumatra's Medan did not hold any auction. "Buyers abandoned the market. They're worried the government may apply a higher export tax next month because palm oil prices have been continuously hitting record highs," said a dealer at a plantation company in Medan, the country's key port for palm oil exports.
Indonesia has gradually increased palm oil export tax to a maximum of 25 percent this year, from just 1.5 percent in June 2007, as mounting global palm oil prices pushed up local cooking oil values. Indonesia adjusts the palm oil export tax monthly based on the movement in international prices. Currently, palm oil is subject to a 9 and 10 percent palm oil export tax, depending on the products.
Malaysian palm oil futures ended nearly 3 percent lower on Friday as investors booked profits while waiting to see if China would import more vegetable oils to curb inflation. The benchmark May contract ended down 112 ringgit to 3,686 ($1,166) ringgit a tonne on Friday, but retreated from a historic high of 4,486 ringgit ($1,420) a tonne on March 4.
In Jakarta, the price of refined, bleached, deodorised (RBD) palm olein - used as cooking oil - fell to 10,800-10,900 rupiah a kg, from 10,950 rupiah a kg on Thursday, tracking losses in Malaysia, one cooking oil dealer said. "But buyers are not interested. They want to buy lower at around 10,500 rupiah," the dealer said. On the export front, crude palm oil for prompt shipment was offered at $1,170 a tonne, free on board Belawan, but buyers did not bid for the shipment.
Comments
Comments are closed.