February 02, 2008	Saturday	Muharram 23, 1429

JAKARTA, Feb 1: Indonesian palm oil prices fell on Friday as the government announced new measures aimed at containing spiralling food prices.

Trading activity was subdued with markets in Malaysia closed for a public holiday and as parts of Indonesia, including the capital Jakarta, were brought to a standstill by flooding following heavy rains.

Indonesia’s state marketing centre sold only 1,000 of 3,000 tons of crude palm oil on offer at 9,149 rupiah ($0.995) a kilogram, down from 9,193 rupiah on Thursday.

In North Sumatra’s Medan, crude palm oil was traded at 9,132 rupiah a kilogram, down from 9,192 rupiah on Thursday, with 250 tons changing hands.

Malaysia’s crude palm oil futures market was closed on Friday, so the Indonesian market lacked fresh leads from its neighbour. Crude palm oil prices in Indonesia, the world’s top palm oil producer, closely track Malaysia’s crude palm oil futures.

But Indonesia’s chief economic minister, Boediono, announced several measures to contain soaring food prices on Friday in a bid to fend off social unrest and keep inflation in check.

In order to prevent further gains in crude palm oil prices,which recently set a new record, the government plans to increase the export tax for crude palm oil to 15 per cent if the price tops $1,100 per ton. The crude palm oil export tax is currently set at 10 per cent if the average price traded in Rotterdam reaches or exceeds $850 per ton.

The price of palm oil, used in products from shampoo to ice cream and biofuel, is roughly 5.5 per cent off an historic high of 3,420 ringgit a ton, reached more than two weeks ago.

In Jakarta, the price of refined, bleached, deodorised (RBD) palm olein, which is used as cooking oil, was offered at 9,000 rupiah a kilo, unchanged from Thursday, but dealers failed to sell as flooding in the capital caused chaos and brought business in some districts to a halt.

We don’t see any buyers today. Even the cooking oil brokers have gone home early to check if their houses were flooded and to avoid traffic jams, the cooking oil dealer in a refiner in Jakarta said.

There was no price quotation available for crude palm oil export due to the holiday in Malaysia.—Reuters