Tight crude palm oil supply supported Indonesian prices on Friday, but trading was subdued as players stayed on the sidelines to await clearer price leads next week. Crude palm oil at the state marketing centre's auction in Jakarta traded at 4,463 rupiah ($0.492) a kg, up from 4,450 rupiah on Thursday.
There were no local auctions in Medan, the provincial capital of North Sumatra and the key port for palm oil exports. "There is no news or guidelines whatsoever, so everybody just waits for Monday," said a trader in Medan. In Jakarta, cooking oil traded at 5,100-5,140 rupiah, little changed from Thursday and supported by good demand and tight supply.
"Local crude palm oil supply is still tight. Buyers only purchase enough stocks for the short term," said a trader in Jakarta. Traders said drought had reduced river water levels, hampering shipment from oil palm-growing areas such as Kalimantan to ports in Sumatra and Java, where olein refiners are concentrated.
On the export front, sellers offered August-September shipment at $460 a tonne, free on board Begawan, against bids of $455. No deals were reported. "The local market is more interesting now for exporters as it fetches higher prices. So they prefer to sell it to the local market than export," said another trader in Medan.