Palm oil prices close the week higher

Palm oil prices close the week higher

LONDON (Reuters): Palm oil prices ended the week higher on the European vegetable oil market on Friday.

Trade talk that the Indonesian government has set a base price for the palm oil export tax has been rumored for a few days and had no impact.

Traders said the Indonesian government has set a base price of $610 a ton for crude palm oil and $640 a ton for olein both prices are valid for the period July 8 to August 8.

No official confirmation from Indonesia was available.

"This is the price you pay the tax on regardless whether the international prices goes up or down," said a trader.

Traders calculated the duty payable on crude palm oil at $366 a ton and $352 a ton for olein.

Indonesia increased the export duty on crude palm oil to 60 percent on Tuesday and to 55 percent from 35 percent on olein in an attempt to slow export which have starved the local cooking oil market of palm oil and sent prices soaring.

Traders said the believed the Indonesian government was using the Rotterdam market as it's bases for the prices.

News that India had cut it's import duty on edible oils from 25 percent to 15 percent with effect from July 10 boosted prices and triggered active trading in palm olein during the morning.

Traders estimate that around 20,000 to 30,000 tonnes of palm olein changed hands in Indian related business.

India said last week that it would imported 150,000 tonnes of palm olein ahead of the ahead of the Hindu festival months of August to November.

"150,000 tonnes is a lot and that is what has set the speculators diving into the market," said one trader.

"However, if olein gets' too expensive the Indian government may switch to rape oil," the trader added.

At the close of business in Europe crude palm oil was unchanged while products were $2.50 higher with no further business reported.

Lauric oils were mixed with coconut oil $5 up after Aug/Sep traded in a switch with Sep/Oct with a $15 spread. Palmkernel oil closed $10 to $5 lower.

Dutch soy oil closed unchanged and neglected while rape oil was one to 1.25 guilders down after Jul traded at 125.00 and 125.50 and Feb/Apr 126.50 guilders per 100 kilos fob ex-mill.