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.