Asian palm oil markets seen mixed, trade cautious
Asian palm oil markets seen mixed, trade cautious
KUALA LUMPUR (Reuters): Asian palm oil markets are likely to be mixed this week as ample supply could weigh on Indonesian prices, regional traders said.
Other markets may firm on the back of more Indian buying and weak currencies, they said.
"The market was active in the morning on Friday but became quiet in the afternoon. Players were on the sidelines because they wanted to know how supply will be (affected) after Bulog releases olein into the market to help stabilize prices," said one trader in Indonesia.
"The trend will be quiet, but we believe prices will soften further. You know that ample supply will mean lower prices."
Indonesia's Industry and Trade Ministry said in a statement on Friday that palm olein refined from crude palm oil which was produced by state-run plantation companies should only be sold to Bulog in order to ensure price stability.
Cooking oil obtained by Bulog from the state plantations should only be used to fulfill the people's need and support small industries, it added.
The statement gave no further details. Indonesian traders said palm olein prices hovered at 5,100-5,150 rupiah/kg in Jakarta.
Bulog had bought 16,850 tons of olein from private companies to boost local supply and reduce prices.
Bulog planned to buy 683,000 tons of cooking oil from private companies and state-run plantation companies until December to help stabilize prices, newspapers reported.
Traders said Malaysia's bullish July export data aided the market last week before profit-taking brought prices down.
Cargo surveyors SGS (M) Sdn Bhd and Caleb Brett on Friday put Malaysia's palm oil exports in July at above 700,000 tons.
Traders said the market expected more buying from India ahead of the Hindu festival.
"I think the Indians are going to buy more oil as they need to consume large quantities for the Hindu festival," a trader said. India's State Trading Corporation bought few parcels of mostly August RBD palm olein last week.