Indonesia's palm oil prices were mostly higher on Thursday, supported by gains in Malaysia and rupiah gains against the US dollar amid a government plan to hike the export tax to 6.5 percent.
In the state marketing centre, which sells crude palm oil from state plantations in Jakarta, crude palm oil was traded at 7,626 rupiah a kilogram, 1.8 percent up from 7,489 rupiah on Tuesday. In North Sumatra's Medan, the leading port for palm oil export, crude palm oil was traded at 7,696 rupiah a kilogram, barely moved from 7,695 rupiah on Wednesday. "The rupiah is firm from yesterday so crude palm oil prices stayed the same," said a trader in Medan.
The rupiah bounced back and steadied at 8,885 per dollar after slipping to a one-month low of 8,945 per dollar. Traders said gains in Malaysia crude palm oil futures also lent support to local prices. Malaysian crude palm oil futures climbed 1.2 percent on midday Thursday with the benchmark August contract up 31 ringgit, or 1.2 percent, at 2,651 ringgit ($773) a tonne.
It settled up 25 ringgit at 2,645 ringgit a tonne on the day. In Jakarta, cooking oil was offered between 8,350 rupiah a kilogram, unchanged from 8,300-8,360 rupiah a kilogram on Wednesday. Prices remained high although the government has extended 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 5,700 rupiah a kilogram 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 Mari Pangestu said Indonesia is considering increasing the palm oil export tax to 6.5 percent to discourage exports and increase supply to domestic markets at lower prices.
In the Indonesian export market, sellers offered crude palm oil for June shipment at $825 a tonne, down from $840 a tonne on Wednesday. But buyers did not bid for the shipment.