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Asia Coconut Oil: Rising exports may depress prices

MANILA: Coconut oil prices are expected to be lower in Europe this week with the expected recovery of exports from the Philippines and lower freight rates, vegetable oil traders said on Monday.

"We are seeing better copra arrivals to Philippine mills. That's why they (Philippine firms) were selling coconut oil in Rotterdam up to July shipment last week," said one trader.

Copra is dried coconut meat from which coconut oil is extracted. The Philippines is the world's largest exporter of coconut oil, with Europe and the United States the major buyers of the commodity.

Philippine coconut oil shipments this month may increase to 53,000-60,000 tonnes from the estimated 41,100 tonnes in March, traders said.

"For this week I expect prices to be unchanged or down $5 per tonne CIF," the first trader said.

He said coconut oil for April/May shipment was traded at $555 per tonne CIF, down $15 from the week-ago $570 per tonne.

The United Coconut Associations of the Philippines has forecast exports in the country this year to rise to 735,000 tonnes from the estimated 464,742 tonnes last year.

Traders also see stable supplies of coconut oil from Indonesia, the world's second largest exporter, this year.

A vegetable oil consultant has forecast Indonesia's coconut oil export at 450,000 tonnes this year, up from 375,000 tonnes in 1999.

A second trader said the easing of freight rates following the decision of oil producers to increase world crude supplies starting this month may also lure more coconut oil sellers from the Philippines.

The same trader said freight rates for Philippine coconut oil for shipment in Rotterdam, the centre of vegetable oil trade in Europe, for May/June shipment was quoted at $42 to $43 per tonne on Monday from the previous $45 per tonne last week.-Reuters