CPO prices show little change in London
CPO prices show little change in London
LONDON (Reuters): Crude palm oil (CPO) prices were little changed at midday yesterday on the European vegetable oil market, traders said.
Only Aug/Sep CPO was offered at US$670 a ton cif., $2.50 under Tuesday's closing price.
On Tuesday CPO sellers jumped by as much as $27.50 a ton following news that Indonesia is to increase export duty on CPO from 40 percent to 60 percent following a surge in exports that has left the local cooking oil market short and sent price soaring.
Indonesia also increased the export duty on RBD palm oil and palm olein to 55 percent from 35 percent.
The previous duties had been set in April when Indonesia lifted a four-month ban on palm oil exports.
In Europe some traders said prices were now looking overdone.
"The difference between CPO and olein is too wide and we may see the market start to come off a little in the next few days," said one.
Traders said there was some concern over shipment delays caused by the higher taxes.
"Some of the smaller exporters may have problems raising the money to pay the tax, if they have to pay when the palm oil is loaded and before they have been paid themselves," said one trader.
In Jakarta, Trade and Industry Minister Rahardi Ramelan said he hoped the new taxes would bring prices down and that cooking oil supplies would stabilize as soon as possible.
"The government will maintain the current export tax levels as long as it is applicable until prices of cooking oil stabilize. The taxes aim at bringing prices down," he told reporters.
He ruled out implementing the quota system, which determines how much oil is for export or for domestic use, in order to stabilize the prices and supply of palm oil.
However, traders in Indonesia doubted the tax would work following Tuesday's jump in prices in Europe and the continuing weakness of the rupiah.
They said it would soon become more profitable to export palm oil again.
On the palm products market RBD palm oil was $2.50 down after dated July traded at $615 a ton fob Malaysian ports.
Olein sellers were $10 down to unchanged after Aug/Sep traded at $642.50 and $645, Oct/Dec at $640 and Jan/Mar at $637.50 a ton fob Malaysian ports.
Coconut oil sellers drifted lower with sellers $2.50 to $15 down, On Monday prices surged in anticipation of an increase in the export duty on coconut oil exports from Indonesia, but there was no mention of this when the other changes were announced.
Forecasts calling for hotter weather in the U.S. Midwest underpinned soft oils with soy oil one to 1.50 guilders up and rape oil 1.25 to one guilder higher.
In Kuala Lumpur, palm oil prices ended off the day's highs after late profit-taking set in to wipe out most of earlier gains, traders said.
They said the Indian purchases on Tuesday, higher soyoil in Chicago and a hike in Indonesia's palm oil export duties had prompted active buying in the morning.
By the close, third month September futures contract was up eight ringgit at 2,440 ringgit ($585.13) a tonne after rising to a high of 2,458 ringgit.