Indonesian palm oil prices were mixed on Thursday on Malaysia's fluctuating crude palm oil futures and government pressure to control cooking oil prices. In North Sumatra's Medan, the leading port for palm oil exports, crude palm oil traded at 6,823 rupiah ($0.752) a kilo, down 1.4 percent from 6,920 rupiah on Wednesday with 400 tonnes changing hands.
"Malaysia crude palm oil futures fell and this pulled down our prices," said a trader in Medan, adding they sold crude palm oil at below 7,000 rupiah in line with government instructions. Malaysian crude palm oil futures fell during morning trade before rebounding to close 0.8 percent higher as strong buying after the sharp decline supported the market.
The benchmark third-month August contract on the Bursar Malaysia Derivatives Exchange settled up 18 ringgit to 2,368 Malaysian ringgit ($683) a tonne after hitting a session high of 2,411 ringgit. Cooking oil in Jakarta traded at 7,600 rupiah, down almost 3 percent from 7,800 on Wednesday because of government pressure to control soaring cooking oil prices.
Cooking oil is a staple and rising price is likely to ignite inflationary pressure. The jump in Malaysian crude palm oil futures lifted Indonesia's crude palm oil export prices. Sellers offered crude palm oil for June shipment at $725 a tonne free on board Begawan, up 2.1 percent from $710 on Wednesday. Buyers bid at $700 but no deals were reported.
Shipments in July were offered at $720, up almost 3 percent from $700 on Wednesday. "Malaysia is up just now, so the prices here are up, too," said a trader in Jakarta. The state marketing centre, which sells crude palm oil from state plantations in Jakarta, failed to sell 3,500 tonnes of crude palm oil due to low bids.
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