CPO supply reaches only 17,000 tons

JAKARTA (JP): Private companies and the joint marketing agency for the state plantation firms have supplied only 17,000 tons of crude palm oil (CPO), far short of the targeted 75,000 tons for buffer stocking, an official said.

"Private sector firms have procured only 7,000 tons of CPO and the marketing agency 10,000 tons," Antara quoted Chairman of the National Logistics Agency (Bulog) Beddu Amang as saying over the weekend.

CPO is a raw material for the production of cooking oil, one of basic commodities whose soaring price can generate inflation.

Cooking oil prices began soaring last year and reached their peak of over Rp 1,600 (70 U.S. cents) per kg on the Moslem Idul Fitri holidays last March. Bulog, which was set up to manage the distribution of basic food commodities and maintain their prices at reasonable levels, was unable to do so for cooking oil prices earlier this year.

Bulog has requested 10 private CPO producers to supply 37,500 tons of CPO and the joint marketing agency for the state plantation firms to supply the other 37,500 tons for its bufferstocking operation.

Bulog's CPO bufferstocking is aimed at bringing down the market price of cooking oil to Rp 1,400, a price level that was obtain before the beginning of the Moslem fasting month earlier this year.

Beddu acknowledged that the slow motion of the CPO procurement was caused by producers' commitments to meet their contracts with overseas buyers.

He added that the current price of cooking oil has declined to Rp 1,410 per kg, the level planned to be reached by the year-end.

According to Beddu, the current decline in the cooking oil price is caused by the importation of olein, a raw material of cooking oil which is made from CPO, from Malaysia and the declining price of CPO in the overseas market.

"The price of CPO from Rotterdam has declined from $650 per ton to $600 per ton," said Beddu.(kod)