JAKARTA, Nov 1: Indonesian crude palm oil prices rose 1.4 per cent to a fresh high of 7,886 rupiah ($0.868) a kg on Thursday, boosted by gains in the Malaysian market.

Indonesia’s crude palm oil, which hit its third high in three weeks, has gained by nearly 50 per cent since the start of the year as strong demand from the energy and food sectors boosted global palm oil prices.

More recently, news about Indonesia’s palm oil tax rates, which are adjusted monthly, as well as gains in crude oil and soyaoil markets have constantly boosted Malaysian palm oil prices.

The centre in Jakarta which sells palm oil from state plantations sold crude palm oil at 7,775 rupiah a kg on Wednesday.

Gains in Malaysia has boosted local prices. But demand is also good, said an official at the centre.

In North Sumatra’s Medan, crude palm oil was sold at 7,860 rupiah a kg, up from 7,850 rupiah on Tuesday. Producers in Medan did not hold any auction on Wednesday.

Prices are gaining because of Malaysia. There’s no jump in demand and production is also good because rains are falling in some producing areas, said a dealer in Medan.

Malaysia crude palm oil futures surged to a record high of 2,959 ringgit ($888) a ton in early trade Thursday as fast-rising crude oil and soyaoil markets saw investors scrambling to cover short positions.

The benchmark January contract closed down 32 ringgit at 2,930 ringgit a ton.

Palm oil at Malaysian crude palm oil futures has gained 47 per cent so far this year on strong global demand from both food and energy, coupled with an expected supply shortfall in the coming months.

Gains in crude palm oil in Indonesia also lifted the price of refined, bleached, deodorised (RBD) palm olein, which is used as cooking oil.

In Jakarta, cooking oil was quoted at 7,625-7,700 rupiah a kg, up from 7,550 rupiah.

Prices exclude a 10-per cent value-added tax.

On the export market, crude palm oil for November delivery was offered at $885 a ton, free on board Belawan. Buyers bid at $875 a ton but there were no reports of a deal at that level.

Dealers said soaring prices have softened demand for the oil.

Buyers are not too aggressive. Prices are too high. They want to see prices stabilise, said the Medan dealer.—Reuters