Indonesian palm oil prices were mixed on Thursday as choppy trading in Malaysia in the past few days pressured trading interest, and the rise in base export prices failed to affect the market. Crude palm oil in North Sumatra's Medan sold at 6,790 rupiah ($0.754) a kilogram, falling from 6,836 rupiah on Wednesday.
At another auction in Medan, the key port for palm oil exports, crude palm oil was offered at 6,824 rupiah. Buyers bid at 6,791 but there were no deals. "The market in Malaysia has been choppy in recent days so local prices are varied," said a trader in Medan.
At the state marketing centre in Jakarta, crude palm oil sold at 6,765 rupiah, up from 6,752 on Tuesday. There was no auction at the centre, which sells palm oil from state plantations on Wednesday. "Some buyers who were reluctant to buy in the past week returned to the market to refill stocks. That's why prices are up," said Aziz Kahar, the head of palm oil marketing at the centre.
Malaysian crude palm futures were marginally up in lacklustre trade on Thursday as the market awaited fresh leads. In Jakarta, cooking oil was unchanged at 7,200 rupiah a kilo. Dealers said a rise in base export prices for the July-August period did not have much of an impact as the market had anticipated the change.
Indonesia raised base export prices of crude palm oil to $676 a tonne from $622 on Thursday. The government also raised base export prices for other palm oil products including RBD palm olein to $746 from $676.
But in the export market, buyers were purchasing crude palm oil for prompt shipment in July and August to fill stocks ahead of the Muslim fasting month of Ramadhan in September. "We still see high demand for July-August shipments. But for forward shipment, demand is still slow," said another trader in Medan.
Crude palm oil for July shipment was offered at $750 a tonne free on board Belawan without any bids from buyers. August shipments were offered at $740 a tonne. Buyers bid at $732.5 a tonne, but no trade was reported.
Indonesia raises palm oil base export price. Indonesia has raised base export prices for palm oil products to bring them in line with international prices, the trade ministry said in a statement on Thursday. The government has also set base export prices for four other palm oil products under the new export tax set in June.
The new prices will be valid from July 10 to August 9. The base export price for crude palm oil has been raised to $676 a tonne from $622 a tonne, while refined, bleached and deodorised (RBD) palm olein - used as cooking oil - has been raised to $746 a tonne from $676.
The government has also raised the base export price for RBD palm oil to $737 a tonne from $652 a tonne and the crude olein base export price to $740 a tonne from $669 a tonne. The base export price for palm kernel has been raised to $134 a tonne from $122.
The government also set base export prices for crude stearin at $698 a tonne while base export prices for RBD stearin is set at $730 a tonne. Base export prices for Palm Kernel Oil and RBD Palm Kernel Oil stood at $843 a tonne and $853 a tonne respectively. Base export prices are used to calculate the amount of tax paid by exporters.
The government raised the export tax for crude palm oil to 6.5 percent from 1.5 percent and for palm oil products to 6.5 percent from 0.3 percent to ease surging local prices. Palm kernel is subject to a 10 percent export tax, up from 3 percent. Crude stearin, RBD stearin, palm kernel oil and RBD palm kernel are subject to 6.5 percent export tax. Previously, there was no export tax. Indonesia is set to take over from Malaysia as the world's top producer of palm oil with output seen at 17.4 million tonnes this year.