Indonesian palm oil prices extended gains on Monday on a softer rupiah against the US dollar and rises in Malaysian palm oil futures. The state marketing centre in Jakarta sold crude palm oil at 8,039 rupiah ($0.857) a kg, up from 7,966 rupiah free on board Belawan on Friday.
"The rupiah is weakening against the dollar and Malaysia has also gained today, which is supporting local prices," said one official at the centre. "But buyers must also need fresh supplies because they are daring to buy above our offer price of 8,017 rupiah."
The centre, which sells palm oil produced by state plantations, will hold its last palm oil auction for 2007 on December 18. Producers in North Sumatra's Medan did not hold an auction. "We don't see sellers in the market today. They want to see if price gains continue tomorrow. But they expect prices will go up tomorrow," said a dealer in Medan, home to Belawan port, which is the key port for palm oil exports.
Dealers said trading would be more active this week as sellers try to get rid of their weekly stocks before the market closes up for a long holiday weekend. Indonesia's markets will close from December 20-25 to celebrate Eid -ul-Azha and Christmas.
Malaysian crude palm oil futures rose on Monday as robust export numbers from a cargo surveyor supported the market amid worries that rain and floods had affected the harvest and transport activities. The benchmark March contract edged up 10 ringgit to 2,940 ringgit ($883) a tonne by the midday break, and ended the day up 45 ringgit at 2,975 a tonne.
The Indonesian rupiah, the worst performer in the region this year, hit a two-week low at 9,400 per dollar. The firmer Malaysian market and weakening rupiah also lifted the price of refined, bleached, deodorised (RBD) palm olein, which is used as cooking oil.
Dubbed as the cheapest edible oil in the world, palm oil-based cooking oil traded between 7,650-7,675 rupiah a kilogram against 7,625-7,650 rupiah on Friday. On the export front, sellers offered crude palm oil for shipment in January at $882.5 a tonne, free on board Belawan. Buyers bid at $875 a tonne but there were no reports of deals made at that price.