960404

Asian oil prices

seen mostly steady

KUALA LUMPUR: Southeast Asian palm and laurics oils prices are seen mostly steady next week, but increasing palmoil supply could pull Indonesian prices down, regional traders said.

"There's plenty of oil coming into the market and this is expected to keep prices at the current level or cause a slight dip," one Jakarta trader said.

"According to my calculation, the tax on olein should be around $9.75," the Jakarta trader said. "The tax on crude palm oil is expected to be slightly higher at $29.12 against $26.32."

The taxes are calculated on a 15-day composite average of international prices in the second half of the previous month. They are usually announced during the first week of each month.

Traders said the expected lower tax on olein could see players becoming more active in overseas markets but added that local olein prices were currently at a premium to Malaysia's.

"Local prices are at a slight premium to Malaysian prices, so our exporters could face stiff competition from the Malaysians," one trader said.

Indonesian RBD palm olein was quoted at around 1,430 rupiah/kg in Jakarta on Thursday compared with 1,420 rupiah last Friday, traders said.

In Malaysia, expectations of increased export business could help prices, Kuala Lumpur traders said.

China is expected to come into the market to buy following Monday's news of a cut in its palmoil import duty to 18 percent from 20 percent.

"The reduction in the import duty could attract more Chinese buyers," a dealer said. "Beside China, we also may see more demand from India and Pakistan."

But some traders said gains could be limited by rising output due to a seasonal upward trend in the production cycle.

Malaysian palmoil output in March is estimated to have risen by between 28-32 percent from February's 427,508 tonnes.

"There will be a tendency for the market to hold if demand news come in. But gains could be limited by the high output," another dealer said.

"If (private crop forecaster) Ivan Wong revises upward his March output projection, then it will have an impact on the market," he said. Wong's crop report is expected to be released either on Friday or Monday.

"The market is experiencing a long period of stagnation. It will take quite a while may be until the next PORLA numbers," a trader at a major refining house said.

Malaysia's Palm Oil Registration and Licensing Authority is due to release Malaysia March palm oil output/stock figures on April 15.

Philippine coconut oil prices are expected to be steady next week as the market looks for direction, although tight supplies will underpin prices in the short-term, traders said.

Prices for April/May reached $730 CIF Europe, up from last week's level of around $715.-Reuter