Vegetable oil traders hail Hasan's departure

Vegetable oil traders hail Hasan's departure

LONDON (Reuters): European vegetable oil traders welcomed the departure of Trade and Industry Minister Mohamad "Bob" Hasan from the Indonesian government yesterday.

Hasan was replaced by Rahardi Ramelan in Indonesian President B.J. Habibie's new "reform and development" cabinet.

But many in the European trade doubted whether much had really changed.

"The truth is people don't think Habibie is going to last very long and while he is there they feel (former president) Soeharto will be pulling the strings from behind the scene," said one trader.

"Hasan caused a lot of confusion in the market when the export ban was on, but we don't know that much about the new guy," said another.

Indonesia banned exports of crude palm oil and its products in January in an attempt to control local cooking oil prices after the rupiah lost 70 percent of its value against the dollar. The ban was removed on April 22 and replaced with export taxes.

Traders said they were still taking a wait-and-see stance on Indonesia.

In Kuala Lumpur, Malaysian palm oil traders were adopting a wait-and-see attitude after the appointment of Rahardi as the new Trade and Industry Minister.

"It is still early to say anything. We don't know that guy. So it has to take a while to see whether he will make any changes to improve palm oil dealing," said a senior palm oil trader in Kuala Lumpur.

"I think firstly he has to control import and export of commodities in Indonesia," said another trader.

Palm oil trading in Indonesia, the second largest producer after Malaysia, had been disrupted in the past few weeks because of the riots in Jakarta and the key commodity trading city of Medan.

There were no disruptions of palm oil shipments out from Indonesia. "At least some oil is coming out from there (Indonesia), and hope things will improve and exporters have more confidence in selling their stocks," a trader said.

In Jakarta, palm oil markets welcomed Ramelan's appointment but other commodities traders said they remained nervous with the country's political turmoil.

Commodities trading had been disrupted in the past few weeks because of widespread riots, which led to former President Soeharto's downfall. Soeharto resigned on Thursday and handed over power to Vice President Habibie.

"The market ignores the line-up of the new cabinet. It is still strictly ruled by supply and demand ... the political situation has caused buyers to shun the market and turn to countries such as Malaysia and Thailand," said a rubber trader in Padang, West Sumatra.

"I hope the new minister will bring new ideas and hopes," another trader said.

Under Hasan, who is Soeharto's close friend, the government imposed a ban on the export of crude palm oil (CPO) and its by- products in order to stabilize prices of olein, the refined form of CPO.