Jakarta to battle KL on palm oil exports
Jakarta to battle KL on palm oil exports
LONDON (Reuter): Indonesia looks set to challenge Malaysia once again for palm oil exports during coming months, traders said.
Indonesian exports slowed during March as higher export taxes forced local players to take a back seat after a successful February when they were winning tenders that would normally have gone to Malaysia.
But these Indonesian exports, which soared to 200,000-220,000 tons during February compared with a normal monthly average of 160,000 tons, pushed local prices higher.
A jump of more than US$40 a ton on the local market and tight supplies forced the government to raise export taxes.
Traders said the subsequent slow down in exports had allowed pipelines to fill up again. Indonesian players are expected to be back ready to challenge Malaysia for market share once taxes start to fall in coming weeks.
"Export taxes on crude palm oil and olein are expected to be around $10 a ton lower in April than in March," said one.
Meanwhile traders were not impressed by prices paid by Egypt at its tender on Tuesday.
Egypt bought 10,000 tons of RBD palm oil at $502.50 a ton c and f and 15,000 tons of RBD stearin at $452 a ton c and f all from FELDA for June 15 arrival.
"Prices were considerably under the market when you take out the freight of around $30 a ton," said a trader.
However, with no demand above normal requirements from India and China prices are unlikely to pick up for some time yet.
"The market is trying to find a level and at the moment olein is holding above $500, but once it breaks this prices could fall sharply," said a trader. Sentiment is being further weakened by the seasonal upturn in Malaysian and Indonesian output.
"Production will be picking up during March, April, May and June and there just isn't the demand there to match it," said another trader.
Latest export data from Malaysia issued by cargo surveyor Societe Generale de Surveillance (SGS) put local exports during the first 20 days of March at 413,890 tons.
Although data for February 1-20 was not available due to holidays, SGS put exports for the whole of the month at 461,734 tons.
On Wednesday morning crude palm oil CIF Europe continued to drift lower with opening prices $2.50 to $5 below Tuesday's close in a tradeless market.
Lauric oils were unchanged on a thin market with many players attending a conference in the U.S.
Soft oils were quiet with sellers 0.50 guilders down.