Coconut oil prices lower in Euro market

Coconut oil prices lower in Euro market

LONDON (Reuters): Coconut oil prices closed sharply lower in
active trading on the European vegetable oil market during
Wednesday afternoon.

Prices have fallen a total of $50 to $55 a ton since Indonesia
said on Tuesday it would not ban the export of coconut oil.

Speculative buying pushed prices higher on fears that
Indonesia would follow up its ban on the export of all grades of
palm oil with a similar block on coconut oil.

"To a lot of people it would have made more sense to ban
coconut oil than palm oil because Indonesian consumers prefer the
taste of food cooked in coconut oil to palm olein," said one
trader.

"They could have kept the coconut oil and exported palm oil to
bring in dollars," the trader added.

Apart from coconut oil the rest of the market was quiet with
most players reluctant to take fresh positions ahead of the
expected announcement on Thursday by the Indonesian government on
the result of Wednesday's talks with the IMF.

"There is a lot speculation about what will be said on
Thursday and everyone has their own ideas. In fact you would be
safer placing a bet at a casino than trade this market at the
moment," said one trader.

Traders said the market was full of rumors about the lifting
of the Indonesian export ban on crude palm oil and its products,
but their counterparts in Indonesia said they could not see the
ban being lifted before the presidential elections in March.

"The Indonesian government will not want the price of cooking
oil to go up again before the elections, but at the end of the
day the IMF is calling the tune and may say the ban has to go,"
said one trader.

Traders added that normally the IMF asks for countries to cut
back on spending and increase exports in return for its help.

"But we won't know until Thursday what has been agreed between
the IMF and the Indonesian government. It is possible that they
have justified the ban by saying they need it to feed local
people," said a trader.

At the close of business coconut oil sellers were $25 to $30
down on the day after Jan./Feb. traded at $560 and $550 a ton,
Feb./March at $560 and March/Apr. at $565 and $560 a ton cif.

Apr./May also traded in a switch with May/June at a $12.50
spread.

Palmkernel oil was $25 down with no buyers in sight.
Crude palm oil cif Europe ended the day $2.50 down with products
$15 to $7.50 up with no further business reported during the
afternoon.

Among soft oils, soy oil closed 1.50 to 0.25 guilders up after
Jan. traded at 129 guilders, Feb./March at 127.50 and 128 and
May/July at 119 guilders per 100 kilos fob ex-mill.

Rape oil ended the day 0.75 to 0.50 guilders higher after
Feb./Apr. fetched 129 guilders per 100 kilos fob ex-mill.
EU sunflower oil closed mixed with ex-tank offers $5 up to $5
down.