[Kabar-indonesia] 19 RI Biz/Econ Reports: Rate Cut Update; Cocoa; ASEAN; SMEs Lag; Rice; SG

[JoyoNews at aol.com]

19 reports:

- Indonesian Tire Makers May Raise 
  Prices 4%-10% - Assoc Head
- update: Indonesia lowers rates, 
  aggressive cuts possible
- Indonesia Press: Matahari To Open
  15-18 Hypermarkets A Year
- Asia Cocoa-Floods may cut Sulawesi 
  crop; butter seeks buyers
- ASEAN economic unity would 
  boost local stability: Australian 
  report
- update: Indonesia to limit 
  ownership of commercial banks
- Indonesian SMEs Lag 
- Indonesia's investment project 
  implementation up 12.12 pct in H1
- Indonesia targets 3 bln USD surplus 
  in balance of payment
- Indonesia's cell-phone market tipped 
  to reach US$5 bln in 2006
- Indonesia predicts 120,000 to rice 
  surplus in 2006
- Indonesia's Semen Gresik upbeat about
    2006 net profit
- Deutsche Bank Indonesia branch 
  launches Islamic fund administration 
  service
- Indonesia's WOM Finance gets
    20 mln usd loan
- Indonesia's export of footwear to
    EU grow
- Indonesia's bilateral trade growth 
  with China sluggish
- Indonesia's fishery trade value still
    low: Director General
- Indonesia's rubber market likely 
  to remain firm
- Indonesia palm oil prices mixed, 
  buyers cautious

Indonesian Tire Makers May Raise 
Prices 4%-10% - Assoc Head

SINGAPORE, July 6 (Dow Jones) -- Indonesia's tire makers will likely
raise prices in the coming months to cope with rising raw material
costs, the head of Indonesia's tire association said Thursday.

Aziz Pane, chairman of the Indonesian Association of Tire Producers,
said the association will have to hold a meeting by August to discuss
the extent of such an increase, which may range from 4%-to-10%.

"Due to the raw material prices, I think we will have to raise it
another 7%-to-10%," Pane told Dow Jones Newswires, adding that the
minimum increase would be 4%.

It will be up to individual tire companies to decide how much they
raise prices and on which products, but Pane said a price increase may
occur "across the board."

Last year, Indonesia's tire makers increased prices by 5%-to-10%, Pane said.

The tire manufacturing sector has taken a beating in the past week,
after leading manufacturers like Bridgestone Corp. (5108.TO) and
Sumitomo Rubber Industries (5110.TO) sharply lowered their annual
profit forecasts, citing higher-than-expected raw material costs.

Natural rubber prices have surged almost 50% since the beginning of
the year, and while synthetic rubber prices haven't increased as
sharply, the strong demand for the commodity has made it "very rare in
the market" and forced tire makers "to compete" to buy it, Pane said.

Michelin (12126.FR), the world's biggest tire maker, said this week
that it would raise prices on some of its tires in the European
market, although analysts questioned its ability to pass on hikes to
customers who are already struggling with soaring oil prices.

This is also a concern in Indonesia, since purchasing power was
sharply curtailed after the government cut fuel subsidies twice last
year.

Its impact was most strongly felt in Indonesia's original equipment tire 
market.

Purchases during the first six months tumbled 42% on year, Pane said,
"because no one's buying new cars."

Still, while tire makers need to consider the buying power of domestic
users, they need to raise prices to recover their mounting costs, he
said.

"Due to the fact that raw material prices are rising, I think we can't
wait," although Pane added that he believes purchasing power is
increasing.

Despite a steep drop in sales in the original equipment market, Pane
said replacement sales for the first six months were up 1.4%, and
exports were 24% higher.

Exports account for 73% of all Indonesian tire sales, Pane said.

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Indonesia lowers rates, aggressive cuts possible

By Muhamad Ari and Yoga Rusmana

JAKARTA, July 6 (Reuters) - Indonesia's central bank cut its key interest 
rate on Thursday, following an easing trend in inflation, and said aggressive 
rate cuts were possible later this year if the economic climate was right.

The central bank reduced its BI rate by 25 basis points to 12.25 percent, 
surprising some analysts.

They said the move might not provide immediate relief to concerns about a 
slowdown in growth in Southeast Asia's biggest economy, but it was a move in the 
right direction.

"It's still not enough to move the economy, but at least it gives a clearer 
signal that Bank Indonesia will continue to loosen its monetary policy," said 
economist Purbaya Yudhi Sadewa of Danareksa Research Institute in Jakarta. "The 
market and private sector will be enthusiastic about the move, although any 
significant impact won't be seen in the near term."

The rupiah and stocks initially shrugged off the rate cut -- the second since 
the 
BI rate was introduced last July at 8.50 percent.

But the rupiah rebounded later in the day on expectations of foreign demand 
for Indonesia's bonds, which even accounting for the rate cut offer a 
relatively high yield.

The prospect of lower interest rates also boosted support for stocks on the 
view that borrowing costs will come down and boost spending.

"If the inflationary pressure and the risk factors going forward are easing 
at a faster pace, any BI rate cuts will be done aggressively," Burhanuddin 
Abdullah, the governor of the central bank told a news conference.

Indonesia's high rates stem from a big rise in fuel prices last October which 
boosted annual inflation in November to a six-year high above 18 percent.

But the inflation has since fallen to 15.53 percent in June <IDIND2>.

The central bank said such factors as weak government spending and investment 
continued to drag on economic growth. It expects second-quarter growth to be 
4.6 to 5.1 percent from a year earlier, compared with annual growth of 4.6 
percent in the first quarter.

AGGRESSIVE CUTS

A Reuters poll ahead of the central bank meeting showed six of 10 economists 
expected rates to be left unchanged and four had expected a cut.

The central bank reiterated that the BI rate could fall to around 11 percent 
by the end of 2006 if year-end inflation falls to its target of around 8 
percent.

A Reuters poll suggested the policy rate would fall to 11.125 percent by the 
end of the year as the impact of last year's sharp price rises fades.

A fall in the inflation rate allowed the central bank to cut rates in May, 
but it held off lowering them in June after a sell-off in emerging markets 
unsettled the rupiah.

However, the rupiah has since firmed. It was quoted at 9,125 per dollar late 
on Thursday, up from 9,160 shortly after the rate cut announcement.

The main stock index closed 0.1 percent higher on the day, having been down 
0.75 percent shortly after the rate cut.

Considering the country's vulnerability to external shocks, further rate cuts 
would probably be gradual, some analysts said.

"Although BI has indicated aggressive rate cuts are possible later in the 
year, we believe it will still be cautious given the potential inflation risk in 
a high and rising oil price environment," said Singapore-based economist 
Leslie Khoo of Forecast Pte. 

(Additional reporting by Fitri Wulandari) 

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Indonesia Press: Matahari To Open 15-18 Hypermarkets A Year

JAKARTA, July 6 (Dow Jones)--Indonesian retailer PT Matahari Putra
Prima (MPPA.JK) plans to spend IDR1.38 trillion over the next four
years to open 15 to 18 hypermarkets annually, Bisnis Indonesia
reported Thursday.

The company expects to increase the number of its hypermarkets to 90
by 2010 from 21 currently, the report said, quoting Matahari's
marketing and merchandising director, Carmelito Regalado.

It will open new hypermarkets on Java and other islands such as
Sulawesi, Kalimantan and Sumatra, the newspaper reported.

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Asia Cocoa-Floods may cut Sulawesi crop; butter seeks buyers

By Fitri Wulandari and Lewa Pardomuan

JAKARTA/SINGAPORE, July 6 (Reuters) - Floods and landslides which hit
Indonesia's main cocoa growing island of Sulawesi may cut mid-crop
output by up to three percent, but exports were largely unaffected,
dealers said on Thursday.

On the product side, slackening demand and ample supplies put pressure
on the price of cocoa butter, a key ingredient for chocolate. Powder
prices hardly moved with grinders in Southeast Asia keen to sell the
product to help ease stocks, said dealers.

More than 200 people were killed after torrential rains triggered
flooding and landslides in South Sulawesi province in late June,
flattening houses and turning vast areas into lakes.

"There will be a decline in the mid-crop but it won't be much. It will
be around two to three percent because the affected areas are not that
wide," said Halim Razak, chairman of the Indonesia Cocoa Association.

"There are between 30,000 and 40,000 hectares of cocoa growing areas
affected by the floods but those areas are not major bean producers in
South Sulawesi," Razak told Reuters by telephone from the provincial
capital of Makassar.

South Sulawesi produces between 50,000 to 60,000 tonnes of cocoa beans
from the mid-crop harvest, which traditionally runs from October to
December.

Cocoa plantations in the province total 300,000 hectares. The
provinces of south, central and southeast Sulawesi account for 75
percent of cocoa output in Indonesia, the world's third-largest
producer after Ivory Coast and Ghana.

Indonesia sells beans to grinders in Malaysia, Singapore, the United
States and Brazil.

Grinders in Malaysia and Indonesia offered butter at a ratio of 2.20
times London futures for nearby shipments. The ratio has been
unchanged in the past few weeks, suggesting slow demand.

Chocolate manufacturers were well-covered to meet demand during the
summer months, and dealers said it was too early for them to buy
butter and powder ahead of Christmas.

"There's been a lot of expansion over the last year, so we see added
capacity. That's why the butter ratio is under pressure and the
chocolate industry is not really increasing purchases," a dealer in
Singapore said.

"The powder price is all over the place in Asia. It ranges from
between $600 to $800 a tonne, depending on the quality," he said.

Some grinders in Indonesia, Asia's second-largest grinder after
Malaysia, offered powder as low as $580 a tonne, dealers said.

Butter prices are determined by multiplying the ratio with related
contracts in London <0#LCC:>.

When processing beans, grinders get butter and cake, which is later
pressed into powder and used for coating in chocolate-making,
beverages and ice-cream.

In the bean sector, dealers said daily arrivals at the export port of
Makassar from plantations were steady at 400 tonnes this week. Early
this month, a vessel loaded with 8,000 tonnes of beans set off the
United States, said dealers.

"Regular shipment to Malaysia and Singapore are still ongoing. There
are one or two shipments a week with volume ranging between 1,000 to
3,000 tonnes," said a Makassar trader.

On Thursday, prices of Sulawesi cocoa beans, collected from farmers
and middlemen, rose to between 12,800 rupiah and 13,000 rupiah
($1.40-$1.43) from 11,700 rupiah and 11,800 rupiah a kg two weeks ago,
tracking gains in New York.

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ASEAN economic unity would boost local stability: Australian report

SYDNEY, July 6 (AFP) -- Creating an ASEAN Economic Community 
would increase regional stability and provide an alternative to China for
major companies looking to invest in Asia, an Australian government
report released Thursday said.

The report, from the Department of Foreign Affairs and Trade, said the
10-member Association of Southeast Asian Nations (ASEAN) would create
a powerful trading bloc if its plans for economic integration by 2020
went ahead.

The report described ASEAN's vision as "wide-ranging and inspiring"
but warned ASEAN members must overcome concerns about loss of
sovereignty to pursue unity in response to economic threats from
regional powerhouses China and India.

"A cohesive ASEAN Economic Community should be a potent force for
regional stability and economic vitality in the Asia-Pacific region,"
the report said.

The report, compiled by the department's economic analytical unit,
said economic integration could make ASEAN "an alternative to China as
a regional production base for transnational corporations".

ASEAN leaders launched "ASEAN Vision 2020" to forge closer economic
integration at a summit in Bali in 2003. But the report said the
regional grouping's consensus decision-making process sometimes meant
such goals were not followed through.

It said the rapid emergence of China and India provided a compelling
argument for accelerating the speed of economic integration.

Foreign Minister Alexander Downer said economic unity would increase
two-way trade between Australia and ASEAN members that already stood
at 55 billion dollars (41 billion US) in 2005.

He said it would also enhance the importance of negotiations launched
last year to created a free trade zone involving Australia, ASEAN
members and New Zealand known as AANZFTA.

"The combination of an ASEAN Economic Community and a comprehensive
AANZFTA could make a significant contribution to prosperity in the
Asia-Pacific region," he said.

Australia has made a concerted effort to forge closer ties within
ASEAN in recent years, last year dropping its opposition to signing
the grouping's non-aggression pact in return for a seat at the
inaugural East Asia Summit.

ASEAN groups Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, the
Philippines, Singapore, Thailand, and Vietnam.

--------------------------------

Indonesia to limit ownership of commercial banks

JAKARTA, July 6 (Reuters) - Indonesia's central bank will soon issue a
rule that prohibits a single shareholder from controlling more than
one commercial bank, in a bid to speed up banking sector
consolidation, Bank Indonesia said on Thursday.

Entities already in control of more than one bank will be required to
comply with the new rule by the end of 2008 at the latest.

Existing shareholders controlling more than one commercial bank may
meet the new requirement by merging the banks they currently control
and setting up a holding company in Indonesia for them, the central
bank said.

"The single presence policy is aimed at increasing the effectiveness
of bank supervision," the central bank said in a statement.

The new scheme is likely to affect investors such as Singapore's
government investment arm Temasek Holdings, which has stakes in the
country's fifth largest lender PT Bank Danamon and the sixth largest
lender PT Bank Internasional Indonesia .

The statement did not further elaborate, including defining what it
means by controlling shareholders. Central bank officials were not
immediately available for comment.

Indonesia has around 130 commercial banks, about half the number
before the Asian financial crisis of 1997-1998, but analysts and the
authorities still consider the total too high.

--------------------------------

Asia Pulse/Antara
July 6, 2006

Indonesian SMEs Lag 

JAKARTA - Exports by small and medium-scale entrepreneurs (SMEs) are still 
lagging behind those of big business, accounting for only 14.76% of overall 
exports compared to 83.24% contributed by big companies, President Susilo Bambang 
Yudhoyono said. 

He called on all sides to help increase the competitive edge of small and 
medium businesses' (UKM) products at home and abroad. 

"The challenge we are facing ahead is to improve the competitive edge of UKM 
products so that they would penetrate the international market," the president 
said while opening an exhibition of primary products of UKM and cooperatives 
at the Sme'sco Promotion Center. 

Though the market potential at home is big - considering the country's 
population, which reached 120 million - the development of small and medium-sized 
businesses should be aimed at increasing their competitive edge on the world 
market, the president said. 

Many UKM products are of good quality and could compete in the market, but 
fail to promote their products or take advantage of their market potential, 
Yudhoyono said. 

On the other hand, he said, Indonesians also don't really appreciate UKM 
products. 

"They were still suffering from the 'fever' of foreign goods whereas some 
local products have no inferior quality than that of foreign goods," he added. 

--------------------------------

Indonesia's investment project implementation up 12.12 pct in H1

JAKARTA, July 6 (Asia Pulse/Antara) - The implementation of investment
projects in Indonesia rose 12.2 per cent in the first half of this
year compared to the same period last year.

The trend is expected to continue with improvements seen in the
investment climate, head of the Investment Coordinating Board (BKPM)
Muhammad Lufti said yesterday.

Investment projects implemented in the January-June period were valued
at Rp45.24 trillion (US$5 billion) or 34.3 per cent of this year's
target of Rp132 trillion.

However, Foreign direct investment (FDI) grew only 4.77 per cent to
US$3.51 billion from US$3.35 billion.

A higher growth was recorded in the implementation of domestic
projects valued at Rp11.19 trillion, or an increase of 42.55 per cent
from the same period last year.

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Indonesia targets 3 bln USD surplus in balance of payment

JAKARTA, July 6 (Xinhua) -- The Indonesian central bank said Thursday
the balance of payment is projected to enjoy a surplus of 3.3 billion
U.S. dollars in the second half of 2006.

"Surplus in the balance of payment is projected to increase due to
steady improvement in exports, while the import growth is slower than
expected," Bank Indonesia Governor Burhanuddin Abdullah told a press
conference here.

He said the surplus in the first half was recorded at 2.17 billion U.S. 
dollars.

Indonesia's foreign exchange reserves were down to some 40 billion
U.S. dollars after the government on June 30 repaid half of its debts
taken from the International Monetary Fund, amounting to 3.8 billion
U.S. dollars, he said.

In the second quarter, the rupiah gained 2 percent against the U.S.
dollar from the previous quarter, averaging at 9,111 per dollar, he
said.

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Indonesia's cell-phone market tipped to reach US$5 bln in 2006

JAKARTA, July 6 (Asia Pulse/Antara) - The value of Indonesia's
cellular telecommunications business is projected to reach Rp45
trillion (US$5 billion) this year, up from Rp35 trillion last year,
Bisnis Indonesia reported.

The cellular telecommunications association (ATSI) said the prediction
is based on a continued increase in the number of subscribers.

ATSI secretary general Rudiantara said the predicted number does not
include sales of fixed wireless access (FWA).

Based on data at the Post and Telecommunications Directorate General,
there are 53 million active phone numbers held by cellular phone
subscribers in the country.

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Indonesia predicts 120,000 to rice surplus in 2006

JAKARTA, July 6 (Asia Pulse/Antara) - Indonesia's agriculture ministry
said it is optimistic the country will be able to maintain self
sufficiency in rice supply this year.

Agriculture Minister Anton Apriyantono said the country is even
estimated to have a surplus of 120,000 tons of rice in 2006.

Anton said based on a prediction by the Central Bureau of Statistics
(BPS), the country's production of unhulled rice will reach an all
time peak at 54.75 million tons this year, up from 54.15 million tons
last year.

Rice imports, therefore, will not be needed this year, he added.

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Indonesia's Semen Gresik upbeat about 2006 net profit

JAKARTA, July 6 (Asia Pulse/Antara) - Despite a decline in cement
demand in Indonesia, state-owned cement maker PT Semen Gresik is
optimistic it will post a net profit of Rp1.12 trillion (US$123.5
million) this year, up from Rp1.02 trillion last year.

Company President Dwi Soetjipto acknowledged there was a decline of
about 3.0 per cent in Indonesia's cement demand in the first quarter
of this year, but he said he is optimistic the country's largest
cement producers will succeed in boosting exports to offset the
decline in domestic market demand.

Dwi said the company will be able to meet the target of Rp140.27
billion in the dividend to be received by the state from the net
profit posted in 2005.

The government owns 51.01 per cent of PT Semen Gresik with Mexico's
Cemex Asia holding 25 per cent of the shares of the publicly listed
company.

Cemex plans to sell 24.9 per cent of its stake to the Radjawali Group.

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Deutsche Bank Indonesia branch launches 
Islamic fund administration service

JAKARTA, July 6 (XFN-ASIA) - Deutsche Bank said it has launched an
Islamic-based or syariah fund administration service, the first in
Indonesia, after having secured approval from the National Syariah
Board on June 8, Elwin Karyadi, the bank's head of product and client
management for domestic custody services, said.

'The opening of the syariah fund administration service was in
response to the growing syariah fund business in the country as well
as in anticipation of the planned issuance of a sovereign Islamic bond
or 'sukuk' in the near future,' Karyadi said at a press conference.

Karyadi said Deutsche Bank currently administers 125 of the 347 mutual
funds in Indonesia worth a combined 13.8 trln rupiah, or about 42 pct
of total mutual fund assets.

The bank also currently administers 145 bln rupiah worth of
syariah-based mutual funds, he said.

Karyadi said the main differences between conventional and
syariah-based mutual fund administration services are the method by
which income and stock dividends are calculated and recognised, and
the options for the payment of tax and donations.

In addition, syariah-based funds can only purchase approved
investments and must be supervised by an independent Syariah
Compliance Board.

The National Syariah Board governs syariah laws including those
relating to custodian banks administering syariah mutual funds in
Indonesia.

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Indonesia's WOM Finance gets 20 mln usd loan

JAKARTA, July 6 (XFN-ASIA) - Motorcycle financing PT WOM Finance has
received a 20 mln usd loan from World Bank unit International Finance
Corp (IFC) for the expansion of its financing business, company
president Benny Wenas said.

The loan will be disbursed in rupiah and will carry an interest rate
of 14-15 pct per annum, with a tenor of five years.

WOM targets providing 4 trln rupiah in new motorcycle financing this year.

The firm has so fair raised 1 trln rupiah in funding and after
obtaining the IFC loan, it expects to receive additional loans from
state-run PT Bank Mandiri and PT Bank Rakyat Indonesia worth 500 bln
rupiah each.

Wenas said the rest of WOM's financing needs are expected to be
covered by loans from foreign banks.

WOM provided funding for the purchase of 362,758 motorcycles last
year, compared with 253,299 motorcycles in 2004.

Its major shareholders include PT Bank Internasional Indonesia with a
43 pct stake, IFC 15 pct, JP Morgan Luxembourg with 6.84 pct and DBS
Nominees (Pte) Ltd which has a 5 pct stake.

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Indonesia's export of footwear to EU grow

JAKARTA, July 6 (Asia Pulse/Antara) - Indonesia's exports of footwear
to the European Union rose 10.39% to US$399.38 million in the first
quarter of 2006, compared to US$361.76 million in the same period last
year.

The increase followed the imposition of anti-dumping import duty on
footwear from China and Vietnam by the EU earlier, the association of
shoes makers (Aprisindo) said.

Aprisindo executive Yudhi Komaruddin, however, said the country could
not fully use the opportunity open to further increase exports to that
region.

Yudhi said there were a number of internal factors hampering efforts
to increase exports to the EU, including inadequate infrastructure,
difficulty in obtaining basic materials, and low productivity and high
costs.

He urged the government to be serious in addressing the problems
before other suppliers such as India, Pakistan and Argentina boost
their exports to the EU.

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Indonesia's bilateral trade growth with China sluggish

JAKARTA, July 6 (Asia Pulse/Antara) - Indonesia's bilateral trade
growth with China is among the slowest in the region with growth for
the last six months at only 2.5%, far lower than the year's target of
10% , a Chinese official said.

Speaking on the sidelines of a seminar here, Chinese embassy minister
counselor for economic and commercial affairs Tan Weiwen said that
Indonesia, the largest economy among the 10 member countries of ASEAN,
is now the fifth in term of trade volume after the Philippines,
Thailand, Malaysia and Singapore.

In 1996, Indonesia was in the second lead after Singapore in trade
volume with China.

Weiwen said China's demand for Indonesian commodities was strong, but
that the supply capacity of Indonesia was low.

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Indonesia's fishery trade value still low: Director General

JAKARTA, July 6 (Asia Pulse/Antara) - Secretary General of Marine
Resources and Fisheries Ministry Andin Taryoto said the value of
Indonesia's fishery products in the world was still small and lagging
behind a number of Association of Southeast Asian Nations (ASEAN)
countries.

Speaking on the sidelines of a national symposium on biotechnology
here on Wednesday, the director general said Thailand and Vietnam
contributed US$4.5 billion and US$2.7 billion respectively to the
world's fish trade while Indonesia only contributed US$1.8 billion.

He said Indonesia actually had various fishery commodities from the
fishery cultures that had high economic potential and could contribute
to the world market.

But it was unfortunate that the Fishery Revitalization Program still
gave priority to traditional commodities such as shrimp, tuna and
seeweed as primary fishery products to boost exports, he said.

Andin said there were other fishery products that had high economic
potentials and could be developed, namely 'jambal' fish, milk fish and
'abalon' shellfish.

"We hope that the development of bio-technology in the fishery sector
would increase the value of Indonesia's fishery trade in the world
market," he said.

He said that besides traditional fishery products, Indonesia also
still depended on fish catching products instead of fishery
cultivation products.

The director general said that at present Indonesia's fishery products
still constituted 60 per cent from fish catching and 40 per cent from
cultivation.

"The government is trying to equalize the ratio into 50 catching and
50 cultivation," he added.

---------------------------------------------

Indonesia's rubber market likely to remain firm

JAKARTA, July 6 (Asia Pulse/Antara) - Indonesia's natural rubber
market is expected to remain firm if oil prices continue to hover
above US$60 a barrel, according to analysts.

The world's demand for natural rubber will continue to increase,
especially from fast growing economies such as China and India, rubber
market observer Harry Tanugraha said.

Mr Tanugraha said China needs around one million tons of rubber a
year, but has a local production of only 50,000 tons.

India also produces only around 50,000 tons of rubber a year against
its annual requirement of 400,000 tons. The two Asian giants,
therefore, have to rely heavily on imports, he said.

Mr Tanugraha said Indonesia, the world's second largest natural rubber
producer, is expected to increase its exports.

Currently, Indonesian natural rubber is sold at a price of US$2 per kilogram.

In the first five months of this year the country exported US$776
million worth of natural rubber.

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Indonesia palm oil prices mixed, buyers cautious

JAKARTA, July 6 (Reuters) - Indonesian palm oil prices were mixed,
with gains in Malaysia crude palm oil futures supporting cooking oil,
traders said on Thursday.

Trading was subdued with buyers mostly on the sidelines, waiting for
clearer price leads.

At a local auction in North Sumatra's Medan, crude palm oil was little
changed at 3,875 rupiah ($0.425) a kg versus 3,880 rupiah on
Wednesday, suggesting low demand despite gains in Malaysia crude palm
oil futures.

In Jakarta, the state marketing centre did not hold a palm oil auction
for the local market on Thursday.

"Buyers are not taking positions yet. We are watching if gains in
Malaysia will hold in the next days," said a trader in Medan, the
capital of North Sumatra and Indonesia's key port for palm oil
exports.

Malaysian crude palm oil futures closed higher, with the benchmark
third-month September <KPOU6> contract on the Bursa Malaysia
Derivatives up 11 ringgit at 1,498 ringgit ($409) a tonne.

In Jakarta, RBD palm olein in Jakarta was quoted at 4,300 rupiah a kg,
up from 4,275 rupiah on Wednesday. No deals were reported.

"The market is very quiet today. There are others who offer lower at
between 4,280 and 4,295 because buyers seek the cheapest," said a
trader in Jakarta.

CPO for export was offered unchanged at $392.5 a tonne free on board
Belawan, but there was no bid from buyers.

Offers for August shipment stood at $400 a tonne. Buyers bid at
$392.5, but no deals were reported.

On Thursday the state marketing centre sold 2,500 tonnes of CPO in an
export auction at $397.5 a tonne, free on board Belawan and Dumai. The
prices rose from $391 last month.

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Joyo Indonesia News Service
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