Asia palm oil prices mixed, RI supply up
Asia palm oil prices mixed, RI supply up
KUALA LUMPUR (Reuters): Palm oil markets in Asia are likely to
be mixed this week with Indonesian prices expected to soften
because of anticipation that the Bulog commodity regulator would
release its stocks into the market to boost supply.
However, prospects of more export business and weak regional
currencies could shore up prices in Malaysia and Singapore,
traders said.
"Prices may fall to Rp 5,000/kg because of the improving
supply. But they may increase again if the stocks are not enough
to stabilize prices," said one trader in Jakarta.
"Players were on the sidelines on Friday, waiting for the
development regarding Bulog's plan to boost supply."
The Bulog commodity regulator said last week it had bought
55,411 tons of palm olein from private and state-run companies
through a tender.
It bought 38,000 tons of olein from state plantations and
private companies two weeks ago, also through a tender. Stocks
were expected to be released into the market yesterday.
Indonesian palm olein prices finished last week at Rp 5,200-
5,300/kg in Jakarta.
Some Malaysian traders said speculation of more Indian tenders
to buy palm olein could shore up prices.
"I think India could buy more oil in coming weeks ahead of a
Hindu festival towards end-year. I don't think harvest for some
of its local oilseed for this year will come in time before the
festival," said a Malaysian trader who expects the market to firm
on the back of weak regional currencies.
India was reported to have bought a fairly substantial amount
of August/September palm olein shipment in the last two weeks,
and traders were optimistic that India would continue its
offtake.
In Jakarta, Indonesian palm olein prices softened yesterday
despite the tight supply and traders said news that the
government would release cooking oil into the market had dampened
market sentiment.
Traders said olein, which is used as cooking oil, started the
week at Rp 5,000-5,100/kg in Jakarta. It was sold at Rp 5,200-
5,300/kg last Friday.
"Offer prices fell this morning simply because of anticipation
that the market will be flooded by cooking oil," said one trader
in Jakarta.
"Supply is still tight, but traders believe there is no use to
keep selling olein at high prices because the market will see
ample supply soon," the trader said.