Palm oil prices bubble on Indonesia export ban
Palm oil prices bubble on Indonesia export ban
LONDON (Reuters): Prices for palm oil, used extensively in soap and cooking oil manufacture, moved sharply higher on Monday after leading producer Indonesia banned exports for the first quarter of 1998.
But elsewhere in commodity markets most prices were drifting lower in very thin between-holiday trading conditions.
Indonesia's Industry and Trade Ministry had sent a letter to top producers in the country telling them to supply their entire crude palm oil production to the domestic market.
Indonesia's own demand for cooking oil usually booms in the first quarter due to traditional celebrations and feasting at the New Year and Eid al-Fitr festivals.
On the Malaysian palm oil futures market the benchmark March position closed 31 ringgit up at 2,078 ringgit a ton, although some traders warned that high prices above 2,000 ringgit were unsustainable due to competition from other vegetable oils.
European traders estimated that around 150,000 tons of palm oil was due to be exported to Europe in the first quarter, and the possibility that this may not arrive pushed European prices higher.
On the off-exchange dealer market crude palm oil CIF Europe was trading around $25 a ton above pre-Christmas holiday levels at $572.50 for January through to June shipment.
In Kuala Lumpur, Malaysian palm oil prices were little changed at noon yesterday, with players trading cautiously ahead of the New Year despite bullish sentiment.
Traders said an imminent correction was expected in the market by both buyers and sellers and this had kept prices boxed in a rather narrow range.
They said news of Indonesia's export ban on crude palm oil for the first quarter of 1998 had already been factored into the market, although it was keeping sentiment firm.
The physicals market was also quiet.
Jan (south) crude palm oil was offered at 2,095 ringgit a ton against bids at 2,085.
Jan (central) saw offers at 2,090 ringgit and bids at 2,080.
Feb (south) was offered at 2,115 ringgit against bids of 2,090.
Feb (central) saw offers at 2,115 ringgit against bids of 2,090.
Jan (north) was offered at 2,085 against bids of 2,075.
Chicago's CBOT soyoil futures ended higher on news of a halt in Indonesian palm oil exports and soymeal futures ended sharply lower Monday on fund sales, traders and analysts said.
"I think the (soy)oil gained on the meal because of what is happening in Indonesia with palm oil," said Sid Love, analyst with Kropf and Love consulting in Overland Park, Kan.
Soymeal futures ended $2.00 to $4.00 a ton lower, with March down $3.80 at $203.40. Soyoil ended 0.09 to 0.16 cent a lb higher, with March up 0.11 at 25.55 cents.