Palm oil market awaits RI news<\/p>\n
KUALA LUMPUR (Reuters): Asian palm oil traders are largely
\nunsure about this week's trend with markets still clouded by
\nuncertainty over Indonesia's supply situation and prospects of
\nslower export business.<\/p>\n
They said the markets were likely to focus on currency
\nmovements.<\/p>\n
\"We feel that the trend is directionless in the immediate
\nterm. The Indonesian issue is still not resolved,\" said a trader
\nin Malaysia. \"Indonesia has to make a firm decision on the supply
\nsituation quickly. If not, we are afraid that smuggling will get
\nworse as there is a short supply.\"<\/p>\n
The Indonesian government, according to a media report last
\nweek, was considering banning export of crude palm oil (CPO)
\nagain due to tight supplies.<\/p>\n
But State Minister for Food A.M. Saefuddin later told
\nreporters Indonesia would continue to export CPO with an export
\ntax.<\/p>\n
He said Indonesia would import CPO if necessary to deal with
\ndomestic scarcity of cooking oil.<\/p>\n
Some Indonesian traders said that at least 300,000-500,000
\ntons of crude palm oil had been smuggled from smaller ports in
\nSumatra from January to June this year.<\/p>\n
Indonesian traders said prices of olein would not fall
\nsignificantly this week due to an increase in possible smuggling.<\/p>\n
\"I think prices will only fall as low as 5,700 rupiah\/kg,\"
\nsaid one Jakarta based trader.<\/p>\n
The government's decision to increase taxes on the export of
\ncrude palm oil (CPO) and its product from 40 percent to 60
\npercent does not ease the tight supply of domestic olein.<\/p>\n
Indonesian traders expect exports to slow down following an
\nincrease in export tax for CPO.<\/p>\n
\"Exports will slow down a bit this week but possible smuggling
\nis on the rise because it is more profitable for the exporters\",
\nsaid the Indonesian trader, citing an end to smuggling as a key
\nto control the price.<\/p>\n
\"The impact from Indonesia's tax hikes is dying,\" one
\nSingaporean trader said.<\/p>\n
Some traders in Singapore said that a firmer Indonesian rupiah
\nand no signs of Indonesia banning palm oil exports could slow
\ndown market activity.<\/p>\n
\"Room for a bull market is limited,\" said a trader in
\nSingapore.<\/p>\n
Malaysia's benchmark, third month October futures contract was
\nclosed on Friday at 2,414 ringgit a ton.<\/p>\n
In Jakarta, Indonesian palm olein prices fell slightly
\nyesterday as traders expected further falls this week due to
\nincreased domestic supplies.<\/p>\n
\"Prices could fall as low as 5,700 rupiah by the end of this
\nweek as so far we have been able to meet the local demand\", said
\none Medan-based trader.<\/p>\n
However, other traders said olein prices would only remain
\nstable until the end of the week if Indonesian rupiah continued
\nto fall. The rupiah was trading at 13,850\/14,075 to the dollar at
\n0930 GMT compared with 13,275\/13,375 late last week.<\/p>\n
Ex-factory olein prices in Jakarta and Medan were quoted at
\n5,759 rupiah\/kg and 5,350 rupiah\/kg respectively.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/palm-oil-market-awaits-ri-news-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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