Palm oil prices off lows on European market
Palm oil prices off lows on European market
LONDON (Reuters): Palm oil prices appeared to have leveled out at the close of the week on the European vegetable oil market Friday, traders said.
Sellers were off the lows for the day, but the upturn was based on sentiment as nothing fundamental had changed.
"The market has dropped US$25 to $30 in the last few days so is due for rally," said one trader.
News that Indonesia was not to ban the export of crude palm oil and its products was welcomed but traders remain wary.
Following a meeting of the economic council led by President B.J. Habibie, Industry and Trade Minister Rahardi Ramelan said the government would ban the export of some subsidized commodities to protect the domestic market.
He later said that crude palm oil and its products would not be subject to the ban.
"Palm oil is not subsidized and so it can still be exported," Ramelan said.
Earlier Indonesia's Coordinating Minister of Economy, Finance and Industry Ginandjar Kartasasmita also said the government did not subsidize cooking oil.
However, traders in Europe said cooking oil was subsidized.
"Olein is used as cooking oil and therefore is subsidized in the local market," said one.
"All I can think is that because the money to stabilize the domestic market is coming from the export tax on crude palm oil, and not in the form of a direct grant from government coffers, they don't consider this a subsidy. It's all a play on words," another said.
News that India had bought two parcels of palm olein had little impact.
India's State Trading Corporation (STC) bought 12,000 tonnes of palm olein at $675.50 a ton and for shipment between July 24 and Aug. 10 late on Thursday, European traders said.
Traders said there was talk the STC may have bought more on Friday but many felt this was just Thursday's business being reported again.
At the close crude palm oil cif Europe was $5 to $2.50 up after Aug traded at $655 a ton cif.
RBD palm oil was unchanged to $2.50 down while olein was $7.50 to $2.50 higher with no further business reported.
In coconut oil Aug/Sept traded at $655 in a switch with Sept/Oct at $670 a ton.
Palmkernel oil closed $10 to $5 lower with no business reported.
Soft oils had lost one guilder across the board by the end of the day with soyoil trading at 119.75 guilders for Aug/Oct, 119 and 119.25 for Nov/Jan and 119.50 guilders for Feb/Apr per 100 kilos fob ex-mill.
Rape oil traded at 119, 119.25 and 119.50 guilders per 100 kilos fob ex-mill for Nov/Jan.