CPO price jumps US$20 per ton

CPO price jumps US$20 per ton

LONDON (Reuters): Crude palm oil prices reached about US$20 a
ton up at the opening of the European vegetable oil market
yesterday following news that Indonesia is to raise export duty
on crude palm oil (CPO) and that India is to tender to buy palm
olein.

Indonesia plans to raise the export tax on CPO to help
stabilise cooking oil prices, Trade and Industry Minister Rahardi
Ramelan said.

"The tax will be increased to 60 percent," he said.

A surge in CPO exports and a poor distribution system have
caused a shortage of cooking in Indonesia. The government
discovered recently that around 80 percent of CPO output in June
has been committed to export. In a normal month around 50 percent
of Indonesia's CPO output goes to the local cooking oil market.

There were no firm sellers of crude palm oil at the opening in
Europe.

"People were still digesting the news, but a rough guess is
that price will be about $20 up," said one trader.

News that India's State Trading Corporation (STC) is seeking
6,000 tons of palm olein for July 10-25 shipment added to the
bullish tone. The result of the tender is expected later today.

On Friday Indian government sources said it plans to buy
150,000 tons of palm olein to import for subsidised sales through
the public distribution system during August-November. The
imports were to meet the expected rise in demand for edible oils
during the Hindu festival months of August to November.

In its latest report Malaysian private forecaster Ivan Wong
estimated June palm oil output at 706,000 tons, 10 percent up
from May. Wong projected end-June stocks at 685,000 tons against
649,842 tons in June and exports at 580,000 tons against 525,668
tons.

However, there was little reaction to these numbers.
"It's mainly Indonesia driving the market followed by the Indian
tender," said a trader.

In the remainder of the market soft oils stood unchanged to
0.50 guilders down while coconut oil was $10 to $12.50 higher.