Traders angry over latest RI CPO twist

Traders angry over latest RI CPO twist

LONDON (Reuters): Crude palm oil drifted lower at the opening of the European vegetable oil market yesterday but participation was thin ahead of this evenings trade dinner in Rotterdam.

Traders expressed anger at the latest twist in the Indonesian palm oil export ban saga.

On Thursday the Indonesian Forestry and Plantations Minister Sumahadi said that Bulog would distribute olein to the local market and that 14 state-run plantations would supply their crude palm oil to the designated processors which in turn would sell their olein to Bulog.

European traders at first saw this as a sensible move to control local prices and were under the impression that the surplus oil from the plantations would be available for export.

However reports coming from Indonesia yesterday morning suggest that this will not be the case.

Indonesian traders reported that many of their contracts have been canceled and that they were unable to meet their shipment contracts as the plantations had been told not to deal with outsiders.

"At first we thought the Indonesian government was going to play by the rules, but now they have moved the goal post yet again, they may as well have not lifted the ban at all," said one.

"I have no comment to make now," said another, "this is a matter for the IMF."

Under the terms of the agreement between the IMF and the Indonesian government, Bulog was to lose its monopoly of all commodities, expect rice.

Crude palm oil opened $5 down to unchanged after May traded at $710 and $705 a ton cif Europe.

Coconut oil started the day $5 to $10 up while soft oils were unchanged to one guilder higher.