JAKARTA, Oct 23: Malaysian palm oil futures inched up on Tuesday with the benchmark January contract rose 14 ringgit to 2,728 ringgit ($885) per ton.
Indonesian crude palm oil prices in Jakarta rose 1.4 per cent on Tuesday to their highest since the first auction in 1998, lifted by strong demand and gains in the Malaysian market.
At the state marketing centre in Jakarta, which sells palm oil from state plantations, crude palm oil jumped to 7,667 rupiah ($0.839) a kilogram from 7,561 rupiah on Monday.
Buyers need fresh supplies, that's why they dare to buy at higher prices, said Azis Kahar, the centre's head of palm oil marketing, adding the tender prices were higher than the centre's offer price of 7,634 rupiah a kilo.
Gains in neighbouring Malaysia crude palm oil futures and weakening rupiah agains the US dollar, also lifted local prices, he added.
But it ended down 10 ringgit at 2,704 ringgit a ton.
The Indonesian rupiah dropped a quarter of a per cent to 9,135 per dollar on Tuesday.
A weakening rupiah against the dollar makes the commodity which is traded in dollars more expensive in local currency terms.
In North Sumatra's Medan, producers sold crude palm oil at 7,583-7,600 rupiah a kilogram, up from 7,490 rupiah a kilo on Oct. 11.
Tuesday’s auction in Medan was the first in a week as most Indonesia’s offices and market closed last week for the Eid -ul-Fitr break.
Demand is good. But the gains in prices are mostly because of Malaysia and a weakening rupiah, said a dealer in Medan, the key port for palm oil exports.
But in Jakarta, ample supplies had prompted producers to offer refined, bleached and deodorised (RBD) palm olein -- used as cooking oil — at cheaper prices.
Cooking oil in Jakarta was quoted between 7,460-7,500 rupiah a kilogram, down from 7,600 rupiah on Monday.
Stocks are plenty while there have been few buyers during holidays. So some producers offer lower prices, said a cooking oil dealer.
There was no price quotation for crude palm oil at the export market.—Reuters
