October 02, 2007	Tuesday	Ramazan 19, 1428

JAKARTA, Oct 1: Indonesian palm oil prices were mixed on Monday with little fresh demand-supply news while a government decision to subsidise cooking oil still put pressure on the olein market.

The state market centre in Jakarta sold crude palm oil at 7,382 rupiah ($0.808) a kg on Monday, up from 7,369 rupiah on Friday.

Local demand is pushing up the prices, said an official at the centre which sells palm oil from state plantations.

But producers in North Sumatra’s Medan did not hold any auction on Monday. Lack of market-moving news and a week-long National Day holidays in China, one of Indonesia’s key buyers, dampened trading interest.

The market is totally quiet. There’s no bid nor offers today. Moreover, Malaysia is down today, said a dealer in Medan, the key port for palm oil exports in Sumatra island.

Demand is also not too strong because China is closed for holidays, he added.

Malaysian crude palm oil futures were barely moved on Monday with the benchmark December contract slipping 3 ringgit to 2,641 ringgit ($779) a ton by the midday break.

The contract ended down 26 ringgit at 2,618 ringgit a ton.

The cooking oil market was sluggish as the recent government decision to subsidise local cooking oil prices weighed on trading.

In Jakarta, cooking oil was offered at 7,350 rupiah a kg, down from 7,400 rupiah on Friday.

We have not sold anything today. We need to work out the value-added tax, said a dealer in Jakarta.

The government has decided to subsidise non-branded cooking oil prices -- widely used by low income families -- by allowing distributors to buy cooking oil from producers without paying a 10-per cent value-added tax.

Producers then can claim the value-added-tax.

Surging global crude palm oil prices have pushed cooking oil prices up by around 30 per cent since early this year.

Prices have remained high despite efforts to discourage exports by imposing higher export tax.

At the export front, crude palm oil for October shipment was offered at $797.5 a ton, with bids at $792.5 but no deals were reported.—Reuters