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.