Pressure mounts on palm oil prices<\/p>\n
LONDON (Reuters): Vegetable oil prices face increasing
\npressure from higher than expected production and low demand,
\nEuropean traders said yesterday.<\/p>\n
Crude palm oil was finding few buyers because European
\nconsumers stocked up on RBD palm oil from Malaysia during the
\nIndonesian export ban at the beginning of the year.<\/p>\n
\"Our plants are geared to crude palm oil, but there is plenty
\nof RBD palm oil in Europe and it's a lot cheaper than the crude,
\nso we will use it,\" one consumer said.<\/p>\n
As of July 21 stocks of palm oil in tanks in Rotterdam stood
\nat 99,622 tons, up 5,416 from the previous week.<\/p>\n
Indonesia banned the export of crude palm oil and by-products
\nbetween the end of December and mid-April in an attempt to bring
\nlocal cooking oil prices under control after the falling rupiah
\nsent the market soaring.<\/p>\n
The ban was replaced on April 22 by export duties of 40
\npercent for crude palm oil and 35 percent for olein. These were
\nincreased to 60 percent for crude palm oil and 55 percent for
\nolein on July 10 as the falling rupiah meant local producers
\ncontinued to find it more profitable to export rather than sell
\nlocally.<\/p>\n
But traders expected cooking oil to become more freely
\navailable in the Indonesian market owing to the actions of the
\nstate commodity regulator Bulog and a pick-up in palm oil output.<\/p>\n
Bulog has opened a tender to buy 29,000 tons of palm olein
\nfrom private companies during July and plans to buy a further
\n60,000 tons from state-run plantations.<\/p>\n
\"Indonesia got off to a bad start this year, but production
\nlooks as if it will soon pick up and this, coupled with the Bulog
\naction, will saturate the local market,\" a broker said.<\/p>\n
Traders estimate Indonesia will produce 5.1 million tons of
\ncrude palm oil this year. About half of that will go to the local
\nmarket, leaving the rest available for export.<\/p>\n
Traders said reports indicated that the El Nio weather
\nphenomenon had not hit Malaysian output as hard as expected.<\/p>\n
In his latest report private forecaster Ivan Wong predicted an
\nincrease of nine percent in palm oil output for July over June.
\nHe said local palm oil production would rise to 760,000 to
\n765,000 tons in July, up eight to nine percent from June.<\/p>\n
End-July stocks were seen at 735,000 to 745,000 tons compared
\nwith the Palm Oil Registration and Licensing Authority's figure
\nof 694,833 tons at end-June.<\/p>\n
\"Even the Malaysians are bearish on palm oil,\" one trader
\nsaid.<\/p>\n
Traders also expected mounting pressure from the U.S. soybean
\ncrop.<\/p>\n
\"The people on the ground who grow the soybeans say they are
\nheading for a big crop this year,\" said one trader.<\/p>\n
\"Growing condition are near perfect,\" said another.
\nSoyoil prices fell in Chicago on Wednesday, with nearby contracts
\nfinishing at 10-month lows on forecasts of good growing
\nconditions.<\/p>\n
Traders said the absence of extreme heat or dryness in the
\nforecasts was significant because the crop was at or near its
\ncritical pod-setting stage.<\/p>\n
\"Prices are not going fall suddenly, but with all these
\nfactors coming together there is going to be a steady build-up of
\npressure,\" a broker said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pressure-mounts-on-palm-oil-prices-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}