Stockpiles to lower coconut oil prices

Stockpiles to lower coconut oil prices

MANILA (Reuters): Coconut oil prices in Europe are likely to dip this week because of ample stocks from major exporters -- Philippines and Indonesia -- and the weaker peso and rupiah against the dollar, traders said on Monday.

"The bias is on the bearish side mainly because of high supplies and the weak currencies," said one vegetable oil trader, adding he expected coconut oil prices to slip by as much as $10 per ton CIF this week from last week.

The same trader said the weaker peso and rupiah against the dollar would compel more exporters of both coconut oil and palm oil.

"When the peso is weak, expect more sellers of coconut oil from he Philippines. In the case of Indonesia, when the rupiah is weak expect more sellers of both palm oil and coconut oil to emerge," the trader, who requested not to be identified said.

The Philippines is the world's largest exporter of coconut oil while Indonesia is the second biggest exporter of both palm oil and coconut oil.

Palm kernel oil, a byproduct of palm oil, is a direct competitor of coconut oil in the oleochemicals industry.

The peso ended at 50.20 to the dollar on Monday from its previous close of 49.93, while Indonesian rupiah was quoted at 10,795/10,815 as of 1032 GMT.

A second trader said coconut oil prices in Rotterdam, the center of vegetable oil trade in Europe, ended flat last week from the previous week, with the market quoting May/June at $295 per ton CIF.

Traders said they expected the Philippines to export up to 125,000 tons of coconut oil this month, nearly double the 70,620 tons in March.

The United Coconut Associations of the Philippines Inc (UCAP) said the country shipped some 59,800 tons of the commodity from April 1 to April 10 compared with actual exports of 77,330 tons for the whole of April last year.

UCAP, which represents Philippine coconut oil millers, refiners and traders, said the country exported 269,880 tons of the commodity in the first quarter of the year, more than double the actual exports of 133,539 tons in the same period last year.

The industry group has forecast Philippine coconut oil exports to rise to 1.22 million tons this year against export estimate of 980,679 tons in 2000 because of good weather.

One trader estimated that Indonesia exported an average of 50,000 to 60,000 tons of coconut oil in the first quarter, or about the same as last year.