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.