JAKARTA, May 6: Indonesian palm oil prices rose on Tuesday, lifted by strong demand, as exporters rushed to buy palm oil in order to benefit from a lower palm oil export tax in May, defying the sluggish Malaysian market, dealers said.

The state marketing centre in Jakarta sold crude palm oil at 9,885 rupiah ($1.07) a kg, up from 9,812 rupiah a kg on Monday.

The auction price was also higher than the centre’s offering price of 9,866 rupiah.The price did not reflect the actual market price.

It’s too high. But the buyers seemed in such urgent need that they were willing to pay more than our price said an auction official at the centre, which sells palm oil from state plantations.

Producers in North Sumatra’s Medan sold crude palm oil at 9,900 rupiah a kg, up from 9,755-9,790 rupiah a kg last week.

They did not hold palm oil auctions on Monday.

Indonesia has cut the palm oil export tax in May to 15 per cent, from 20 per cent in April, following an easing in palm oil prices in the international market.

Indonesia adjusts its export tax for palm oil products every month in line with the movement in palm oil prices in the world market.

Malaysian crude palm oil futures edged lower on Tuesday as investors took profits and stayed away due to an increasingly cloudy outlook for vegetable oils.

The benchmark July contract on the Bursa Malaysia Derivatives Exchange settled down 3 ringgit at 3,387 ($1,075) ringgit a ton on the day.

Palm oil prices, which have fluctuated for the past three weeks, are heading downwards on a bearish mix of factors such as lower Indonesian export taxes, weak soyaoil and a firmer ringgit against the dollar.

In the cooking oil market, refined, bleached, deodorised (RBD) palm olein was offered at 9,975 rupiah a kg, up from 9,850 rupiah a kg.

On the export front, sellers offered crude palm oil for delivery in May at $1,140 a ton, free on board Belawan. Buyers bid at $1,110-$1,115 a ton, but no trades were reported.—Reuters