Asian palm oil markets eye Indonesian trading

Asian palm oil markets eye Indonesian trading

KUALA LUMPUR (Reuters): Asian palm oil traders are likely to
watch Indonesian markets closely this week as trade fully resumes
following weeks of political turmoil.

Demonstrations and riots came to an end in Indonesia after
President Soeharto resigned on Thursday.

"For sure, the market will start to return to normal on
Monday, but it is still too early to make predictions on how the
market will behave...just wait and see," said one trader in
Jakarta.

Traders in Medan, they key commodity trading city in North
Sumatra, said they expected Chinese merchants to return to the
city from Singapore, where they fled because of the riots in
capital Jakarta and Medan.

The new Indonesian President, B.J. Habibie, named a 36-member
"reform and development" cabinet on Friday.

Indonesian traders said they welcomed the appointment of Trade
and Industry Minister Rahardi Ramelan, replacing Mohamad "Bob"
Hasan, despite the fact they did not have any idea how the new
minister would deal with palm oil issue.

Ramelan was previously State Minister of Research and
Technology under Soeharto.

"We need somebody who knows the market and how it behaves. But
in general, there is a sign of relief that Bob Hasan has been
replaced," said one trader.

Traders in Kuala Lumpur were also adopting a wait-and-see
attitude after the appointment of Ramelan.

"It's is still too early to say anything. We don't know that
guy. So it has to take a while to see whether he will make any
changes to improve palm oil dealing," said a senior palm oil
trader in Kuala Lumpur.

Traders added they are closely watching developments in the
Indonesian palm oil market and currency movements.

Indonesian crude palm oil (CPO) was tendered at 3,295
rupiah/kg on Friday, and palm olein varied from 3,850-4,400
rupiah/kg.

The Indonesian rupiah was quoted at around 10,500/11,000 to
the dollar in late Friday trading.

"We are watching what is going to happen next in the
Indonesian palm industry after the appointment of the new trade
and industry minister," another Malaysian trader said.

The Malaysian market is also waiting for May 1-25 palm oil
exports data due on Monday.

Traders said that although the market tone remains firm, a
rising domestic output could limit gains.

Malaysia's benchmark, third month, August futures contract
closed on Friday at 2,423 ringgit a tonne.