Palm oil prices little changed in Europe on limited demand

Palm oil prices little changed in Europe on limited demand

LONDON (Reuters): European vegetable oil prices were little
changed from Thursday's close at opening yesterday.

Traders said the market remained under pressure from good
weather conditions in the U.S. Midwest and slow demand for palm
oil against a background of expectations of higher stocks.

News that the Indonesian state commodity regulator Bulog is to
buy a total of 683,000 tons of cooking oil from private companies
and state-run plantations between now and December was seen as
bearish.

The oil will be sold into the local market at a subsidize rate
using money raised form the duty imposed on palm oil exports.

Since July 10 a 60 percent duty has been imposed on crude palm
oil exports and 55 percent on RBD palm oil and olein.

"This what must people have been saying the Indonesian
government should do for some time," said one trader.

"The news is slightly bearish for the market, because the
local Indonesian market will soon be flooded bringing prices down
and eventually more palm oil will become available for the export
market," said another trader.

Traders estimate that Indonesian will produces around 5.1
million tons of crude palm oil this year, around half of which is
needed for the local market.

Crude palm oil cif Europe opened unchanged with no early trade
reported.

Among products olein traded at $650 for Aug, $630 for Sept.,
$620 for Oct. and $620 and $615 a ton fob Malaysian ports for
Oct./Nov.

Lauric oils were mixed with coconut oil $5 up to unchanged and
palmkernel oil unchanged to $10 down.

Soft oils were mostly unchanged despite the lower close in
Chicago overnight on the back of good crop growing conditions in
the U.S. Midwest.

In Jakarta, Indonesian palm olein prices were mostly stable in
late trading yesterday and traders were expecting prices to stay
at the same level next week.

"The market is likely going to be stable, but it depends on
how the rupiah behaves next week," said one trader in Medan,
North Sumatra.

"The fact that cooking oil will flood the market soon will
also keep prices down," he said.

He said traders in Medan continued to sell cheap cooking oil
at 3,500 rupiah/kg to help ease the burden of the local people
who are struggling with rising prices of essentials because of
the currency crisis.

The rupiah was little changed against the dollar in late
trading yesterday, with the focus still on next week's donors'
meeting in Paris, dealers said.

Spot rupiah was closed at 14,125, unchanged from Thursday's
closing. The rupiah has been stable throughout the week, ranging
between 14,050 and 14,300.

Traders said state commodity regulator Bulog had bought 16,000
tonnes of olein from private companies in Sumatra at between
4,850-4,900 rupiah/kg. They said delivery to the main island of
Java was likely to soon follow.

Bulog planned to buy 683,000 tons of cooking oil from private
companies and state-run plantation companies until December to
help stabilize prices, according to a local newspaper.