Indonesian palm oil prices extended losses on Wednesday, tracking weakening Malaysian palm oil futures and with lacklustre local demand providing little support. Crude palm oil at the state marketing centre in Jakarta was sold at 8,063 rupiah ($0.878) a kg, down from 8,075 rupiah a kilo on Tuesday.
"Malaysia was down in the morning session. Also, there has not been any jump in local demand, which is keeping a lid on prices. They are still buying but not big amounts," said an official at the centre which sells palm oil from state plantations.
The centre only sold 3,500 tonnes out of 5,500 tonnes of crude palm oil offered in the auction. Producers in North Sumatra's Medan did not hold any auctions, waiting to see if a downtrend in prices will persist. "Sellers don't want to sell yet because they see prices are easing in Malaysia and in Jakarta's auction," said a dealer in Medan, the key port for palm oil exports.
Malaysian crude palm oil futures edged lower on Wednesday on growing concerns that export demand will be dented due to the record price peaks hit last week. The benchmark January contract fell 11 ringgit to 2,913 ringgit ($871) per tonne. But the contract closed up 10 ringgit at 2,934 ringgit a tonne.
In Jakarta, prices of refined, bleached, deodorised (RBD) palm olein used as cooking oil were also down, in line with losses in crude palm oil prices. Cooking oil in Jakarta was offered around 7,750 rupiah a kilogram, down from 7,850 a kilogram on Tuesday.
Buyers were reluctant to take position as they consider prices were still high, said a cooking oil dealer in Jakarta. On the export market, sellers offered crude palm oil for November shipment at $880 a tonne, free on board Belawan, down from $885 a tonne on Tuesday. Buyers bid at $877.5 but there were no reports of deals made at that price level.