Indonesian crude palm oil prices at the state marketing centre rose more than 6 percent on Monday to hit a fresh peak in line with record Malaysian prices and strong local demand. The centre in Jakarta, which sells crude palm oil from state plantations, sold crude palm oil at 11,286 rupiah a kg, an increase of 6.5 percent from 10,598 rupiah a kg on Friday.
"The jump in Malaysian palm oil futures boosted local prices. Also, we see a good demand from domestic market," said Aziz Kahar, the centre's head of palm oil marketing unit. Crude palm oil prices at the centre, which is the benchmark for the country's cash palm oil market, have risen more than 28 percent this year, after surging 51 percent in 2007.
The rally in Indonesia has been driven by the Malaysian crude palm oil market which has been setting new records in recent weeks as gloomy crop outlooks in China and India have stoked fears of tight supplies in the coming months.
Dorab Mistry, a director of India's Godrej International Ltd, told an industry gathering last week that strong demand from India and China were likely to push Malaysian palm oil prices above 4,000 ringgit a tonne soon, and to 4,500 ringgit between September 2008 and February 2009.
Producers in North Sumatra's Medan did not hold any palm oil auctions on Monday, with players on the sidelines, watching for price movement. The benchmark May contract on the Bursa Malaysia Exchange ended up 325 ringgit at 4,330 ringgit ($1,355) a tonne after rising as high as 4,332 ringgit.
But record high prices have scared away players in the local cooking oil market. Some refiners in Jakarta did not quote the price of refined, bleached, deodorised (RBD) palm olein, used as cooking oil, but a cooking dealer said cooking oil was quoted about 12,000 rupiah a kg, rising from 11,100 rupiah a kg.