Palm oil firm in Europe on Indonesian buying talk

Palm oil firm in Europe on Indonesian buying talk

LONDON (Reuter): Talk that Indonesia was buying palm olein from Malaysia firmed palm oil prices on the European vegetable oil market yesterday morning.

"Palm oil is very hot this morning because of the Indonesia buying," said one trader.

Traders said that a Singapore based house had been active and they were believed to be buying for Indonesia.

"These people are well known for buying on behalf of Indonesia," said another trader.

European traders estimate that around 8,000 tons of olein was bought today, on top of 8,000 tons bought earlier in the week.

Normally when Indonesia buys palm olein it has been selling crude palm oil to Malaysia, but traders said this is not happening this time.

The weak ringgit against the dollar also helped to support prices with traders reporting possible short covering by major players.

"We have seen different major players in the market during the week which seems to point to some good export business," said a trader.

Lower Chicago futures on expectations of some favorable rainfall in the U.S. Midwest over the weekend and a further easing of the dollar against the guilder gave soft oil sellers more leeway on the downside.

At midday crude palm oil sellers were $2.50 to $7.50 up after Oct/Dec traded at $517.50 a ton cif.

Among products RBD oil was $5 higher after Oct/Dec traded from $482.50 up to $492.50 while olein was $7.50 to $5 up after Sep traded from $530 upto $536, Oct/Dec at $530 and Jan/Jun at $527.50 a ton fob Malaysian ports.

Lauric oils were nervous with sellers unwilling to set firm prices and at midday traders quoted levels for coconut oil at around $10 to $15 up from Thursday close while palmkernel oil $7.50 to $10 higher.