Indonesian palm oil prices eased on Thursday because of a drop in the Malaysian market and slow demand in the local market, dealers said. In North Sumatra's Medan, home to Belawan port - the key port for palm oil exports - producers sold crude palm oil at 10,020 rupiah ($1.07) a kg, down from 10,200 rupiah on Wednesday.
In Jakarta, the state marketing centre sold 2,000 tonnes of crude palm oil at 10,009 rupiah a kg, free on board Palembang in South Sumatra. But the centre failed to sell crude palm oil from Belawan port, which is the benchmark for the centre's auction prices.
"Malaysia eased today. That was the only factor. But volatile trading made players cautious," said a dealer in a plantation firm in Medan. Malaysian crude palm oil futures rose in the morning session on Thursday as some investors were convinced that a sell-off in crude oil and other vegetable oil markets would be short-lived. But futures eased at the end of the day.
The benchmark August contract on the Bursa Malaysia Derivatives Exchange rose 11 ringgit to 3,598 ringgit ($1,111) per tonne by the lunch break after going as high as 3,625 ringgit. But it closed down 22 ringgit at 3,565 ringgit on the day. In Jakarta, refined, bleached, deodorised (RBD) palm olein, used as cooking oil, also fell to around 10,150 rupiah a kg, from 10,200 rupiah on Wednesday.
"Cooking oil demand has been slow because household consumers are tightening their budget after the recent hike in fuel prices and ahead of the new school term in June," said a dealer in a refinery in Jakarta. On the export front, sellers offered crude palm oil for delivery in June at $1,170 a tonne, free on board Belawan. Buyers offered at $1,160 a tonne, but no trade was reported.