Indonesian palm oil prices eased on Tuesday, hit by sharp losses by Malaysian crude palm futures and increasing supplies of domestic crude palm oil. There was no auction in the state marketing centre in Jakarta which sells palm oil from state plantations.
In Medan, the leading port for palm oil export, sold some 500 tonnes of crude palm oil at 6,590 rupiah ($0.727) a kilogram, slipped from 6,620 rupiah on Thursday.
"Malaysian crude palm oil is down, moreover, supplies are increasing," said a trader in Medan. Malaysian crude palm oil futures fell almost 2 percent on Tuesday as expectations of a build-up in stocks due to weakening demand and an uptick in imports from Indonesia.
The benchmark September contract on the Bursa Malaysia Derivatives Exchange was down 42 ringgit, or 1.8 percent, at 2,330 ringgit ($672) a tonne, after hitting moring low of 2,321 ringgit. The fall in Malaysia pushed down cooking oil prices and export shipment offers of crude palm oil for July until December.
In Jakarta, unbranded cooking oil which is widely consumed by low-to-middle class people was traded at 7,220 rupiah a kilogram, slightly down from 7,250 rupiah a kilogram on Monday.
The government has been trying to curb rising cooking oil to 6,500-6,800 rupiah a kilogram including raising the crude palm oil export tax to 6.5 percent from 1.5 percent and its products to 6.5 percent from 0.3 percent.
"Cooking oil prices were lower today due to a fall in Malaysian futures," said a cooking oil trader in Jakarta, adding players were waiting for the prices to hit the lowest point.
At the export market, sellers offered July shipment at $730, down $5 a tonne on Monday. Buyers did not make any bids. Sellers offered October to December shipment at $695 a tonne, down 0.35 percent from $697.5 on Monday without any bids from buyers.