[Kabar-indonesia] 19 RI Biz/Econ Reports: Inflation Seen Flat Despite Disasters; Bonds; Coffee

[JoyoNews at aol.com]

19 Reports:

- Indonesia July inflation seen flat vs
    June despite disasters - statistics 
  bureau
- Indonesia says healthy demand for first
     retail bonds
- Indonesia planned Islamic bond issue 
  depends on market conditions - minister
- Indonesia To Submit Islamic Bond Bill 
  Oct; Targets 1Q Sale
- Interview - Indonesia Sumatra 06 coffee 
  exports to fall
- Bank Indonesia awards 39.30 trln rupiah
    1-mth SBIs at fixed rate 12.25 pct
- Indonesia cancels US$140 mln loan
    from JBIC
- Broker call - Indonesia's Bakrie Brothers
    maintained 'overweight' - JP Morgan
- Indonesia's Total Persada launches IPO 
  of 300 mln shares at 345 rupiah each
- JP: PT Indonesia Air Transport (IAT) 
  sets offer price at Rp 130-150 a share 
- Indonesia's Lion Air may issue bonds
    to buy planes
- Indonesia businessman Gobel keen on
    taking over ailing Bouraq Airlines - report
- Indonesia's Sampoerna sells subsidiaries
    to Sigmantara
- Indonesia's Nusantara Infrastructure to
    merge with Nusantara Konstruksi
- Indonesia's Tunas Financindo makes last
    repayment on 350 bln rupiah of bonds
- PT Media Nusantara Citra to issue
    US$150mln of bonds
- Indonesia to import more used electric
    trains from Japan
- Indonesia's Astra Agro H1 CPO sales
    476,597 tons, up 22.7 pct
- Indonesia palm oil prices mixed,
   players on sidelines

Indonesia July inflation seen flat vs June 
despite disasters - statistics bureau

JAKARTA, July 19 (XFN-ASIA) - July inflation is expected to be flat
compared to the previous month despite the latest tsunami and quake
disaster, drought in some parts of the country and the hike in the
price of rice, Central Bureau of Statistics (BPS) chief Rusman
Heriawan said.

"The inflation trend is yet to go up," he told reporters.

He said the biggest contribution to this month's inflation will come
from Yogyakarta as people in the province are still trying to recover
from the impact of the massive earthquake catastrophe in May.

The latest tsunami that smashed into the southern coast of Indonesia's
Java island this week has killed at least 525 people, the government
said.

Over the past two months the price of food, led by rice, has become
the major inflation driver. In June, the consumer price index (CPI)
crept up 0. 45 pct from May and increased 15.53 pct year-on-year.

In the six months to June inflation was recorded at 2.87 pct, the
lowest over the past three years.

Heriawan predicts yearend inflation will reach 7.7 pct, or slightly
below the government's forecast of 8.0 pct.

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Indonesia says healthy demand for first retail bonds

By Adriana Nina Kusuma

JAKARTA, July 19 (Reuters) - Indonesia's first sale of sovereign
retail bonds is attracting healthy demand, the finance minister said
on Wednesday, amid expectations interest rates will fall.

The government started marketing the three-year bonds this week with a
12.05 percent coupon rate. Some officials expect the proceeds to reach
around 2 trillion rupiah ($216 million).

Indonesia has said it might issue a second retail bond before December
as it seeks to widen its investor base to boost the government bond
market and raise funds to plug the budget deficit.

"According to dealers that we have appointed as selling agents, they
estimate that (demand) is good," Finance Minister Sri Mulyani
Indrawati told reporters.

The retail bonds are on sale until until Aug. 4 and payment has to be
made by Aug. 9.

The bonds carry a nominal value of 1 million rupiah and the minimum
purchase is 5 million rupiah ($540).

"Demand for the retail bonds seems to be good," said Randy Pangalila,
senior vice president in charge of fixed income at brokerage Trimegah
Securities, one of the appointed selling agents for the bonds.

A key reason for the healthy demand was for buyers to lock in current
interest rates because they were expected to fall later in the year,
analysts said.

The central bank earlier this month cut its policy rate, the one-month
BI rate <BIPG>, by 25 basis points to 12.25 percent for only the
second time since it was introduced last July.

At the time, the central bank said further rate cuts were possible
later in the year.

The government has already sold around 48 trillion rupiah in bonds
this year, including foreign currency bonds, to help plug this year's
state budget deficit, estimated at 1.2 percent of gross domestic
product.

High yields on Indonesian government bonds have attracted strong
foreign demand this year.

Ratings agencies rate Indonesian bonds below investment grade, or as junk 
bonds.

Standard & Poor's Ratings Services, for example, rates Indonesian
local currency government bonds "BB" -- two notches below investment
grade.

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Indonesia planned Islamic bond issue depends on market conditions - minister

JAKARTA, July 19 (XFN-ASIA) - The government said the planned issuance
of sovereign Islamic bonds, or 'sukuk,' later this year or early next
year will depend on market conditions and the risk profile of the
instrument, Finance Ministry Sri Mulyani Indrawati said.

"It does not mean that when the instrument is ready, the government
will immediately launch the Islamic bonds. It depends on market
conditions and the appetite of investors," she told a press
conference.

She said she expects the draft bill on sukuk to be enacted into law by
the end of this year or early next year. This will provide a legal
basis for the government to issue the instrument.

She reiterated that the government has no plans to replace global
bonds with sukuk, saying the issuance of sukuk will diversify
available instruments for the government to generate funds to cover
the budget deficit.

"It is a matter of choice. We will evaluate which instruments offer
the cheapest cost and are less risky. If sukuk is offering cheaper
cost and is less risky, the government may just issue sukuk," she
said.

"At this stage, we cannot determine yet how much sukuk and global
bonds will be issued for next year's budget," Sri Mulyani said.

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Indonesia To Submit Islamic Bond Bill Oct;Targets 1Q Sale

SINGAPORE, July 19 (Dow Jones)--The Indonesian government aims to
submit to parliament in October a bill that, if passed, would allow it
to sell Islamic bonds for the first time, Rahmat Waluyanto, the
director of treasury bond management directorate at the Finance
Ministry, said Wednesday.

If passed the following month, the government would look to tap the
market in the first quarter of next year, he said. Both rupiah and
U.S. dollar issuance are in the cards.

Jakarta has been mulling Islamic bond issuance for several years but
action has become more urgent with the world's largest Muslim nation
threatening to fall behind in the race to grab funds from the oil-rich
Middle East and increasingly savvy Muslim investors globally.

A team comprising representatives from various ministries, the central
bank and the national Sharia council is drafting a bill that will
address three key areas of contention - special purpose vehicles,
trustees and the usage of underlying assets - that are requisite to
the structuring of bonds that comply with Sharia, or Islamic law.

Indonesia currently has no laws on SPVs or trustees, and the
government is not allowed to transfer ownership of its assets. Under a
typical Islamic bond, assets are "sold" to a special purpose vehicle,
which makes payments based on those assets in lieu of interest, which
is considered taboo under the Muslim faith.

The law will detail the ijarah - or leasing - structure which is
likely to be the principle the government uses first.

"We have already the assets and I think it's more practical for the
government to consider the ijarah (principle)," he said.

The structure is also one that is used frequently by other
jurisdictions and is acceptable in both Asia and the Middle East.

"We see the potential for the sukuk (demand) is there from Middle East
investors as well as domestic investors," he added.

Assets that would be set aside to provide the coupon-like payments
would included government land and buildings.

The law will also mention mudharabah, musyarakah and, perhaps, istisna
structures that the government could assess going forward, Waluyato
said.

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

Bank Indonesia awards 39.30 trln rupiah 1-mth SBIs at fixed rate 12.25 pct

JAKARTA, July 19 (XFN-ASIA) - Bank Indonesia said it has awarded 39.30
trln rupiah worth of one-month Bank Indonesia Certificates (SBI) at a
fixed rate of 12.25 pct.

The SBI rate is pegged to the central bank's key policy rate, called
the BI rate.

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Interview - Indonesia Sumatra 06 coffee exports to fall

By Fitri Wulandari

JAKARTA, July 19 (Reuters) - Robusta coffee exports from Indonesia's
key coffee-growing island of Sumatra are likely to fall between 40 and
50 percent in 2006 as heavy rains have cut output, an industry
official said on Wednesday.

"Sumatra's coffee exports fell by 30 percent in the first half.
Exports are likely to fall 40 to 50 percent. We exported 334,845
tonnes last year," Nuril Hakim, chairman of the Indonesian Coffee
Exporters Association (AEKI) for Lampung branch, told Reuters in an
interview.

"Production will be lower this year because heavy rains fell when
coffee trees produced flowers. Also carryover stocks in Lampung have
dried out," said Nuril.

In the first half of 2006, coffee bean exports from Sumatra fell 30
percent to 100,358 tonnes, from 143,213 tonnes in the same period last
year.

The beans, collected from the southern Sumatra coffee-growing areas of
Lampung, Bengkulu and Palembang, were sold via Panjang port of Lampung
province.

Coffee output from coffee-growing areas in southern Sumatra accounts
for 70-75 percent of Indonesia's total coffee output, which is
estimated at 315,000 tonnes in 2006.

Robusta constitutes 85 percent of coffee output from the world's
fourth-largest coffee producer, while the rest is aromatic and
high-value arabica.

The projected lower output, however, is expected to support robusta
coffee price at an average of $1,300 a tonne in 2006, Nuril said.

"We hope prices will stay at around $1,300 this year because lower
production will cut supply in the market, but demand is expected to
steady," he said.

The benchmark September contract <LKDU6> at the London robusta coffee
futures touched a 6-1/2-year high at $1,340 a tonne on July 7. The
September contract <LKDU6> settled up $16, or 1.3 percent, at $1,234 a
tonne on Tuesday.

In Lampung, prices of grade four robusta <COFFEE/ASIA1> softened to
between 10,600 and 10,700 rupiah ($1.15 and $1.16) a kg, from 10,700
and 10,800 rupiah a kg in end June, tracking lower robusta coffee
futures.

"Trading is quiet in Lampung because supply is already dwindling as
main crop harvest is nearly over. Buyers are not too keen to buy
because they want to wait until prices fall further," said a trader in
Lampung.

Daily coffee bean arrival to Lampung port averaged 300 tonnes this
week, down from 500 tonnes a day in June as main crop harvest is 
at tail's end.

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

Indonesia cancels US$140 mln loan from JBIC

JAKARTA, July 19 (Asia Pulse/Antara) - The government has cancelled a
US$140 million loan from Japan Bank for International Cooperation
originally to be used for a flood control project.

The loan was cancelled as the people of Tangerang in Banten opposed
the project, which will divert the flows of water from the Cisadane
river to that area from Jakarta.

A deputy at the National Development Planning Board Lukita Dinarsyah
Tuwo said the project will help reduce risks of floods in the capital
city.

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Broker call - Indonesia's Bakrie Brothers maintained 'overweight' - JP Morgan

JAKARTA, July 19 (XFN-ASIA) - JP Morgan said it is maintaining its
"overweight" call on conglomerate PT Bakrie Brothers after the company
won the Kalimantan-Java gas pipeline development project.

It said the news will fuel positive momentum on Bakrie's shares.

It set a target price for Bakrie of 215 rupiah per share by April 2007.

At 10.53 am, Bakrie Brothers was up 5 rupiah at 175.

The downstream oil and gas regulatory body BPH Migas earlier announced
that Bakrie won the bid to build a 1,200-km gas transmission pipeline
stretching from East Kalimantan to Central Java.

The project would be done on a build-and-operate scheme, with Bakrie
holding a 30-year contract to operate the pipelines. The project will
commence in 2007 and take three years to complete.

JP Morgan said it estimates that approximately 35-40 pct of the gas
pipeline project will comprise steel pipes with an equivalent value of
420-480 mln usd.

Assuming a 10 pct net margin, the net worth of the pipeline business
of the project is estimated at 42-48 mln usd or equivalent to 399-456
bln rupiah, translating into 14-17 rupiah on a per share basis, it
said.

It said it expects the company to post a stronger performance in the
second quarter of 2006 as its subsidiaries, PT South East Asia Pipe
Industries (SEAPI) and Bakrie Pipe Industries, begin to deliver 120
mln usd worth of pipeline projects during the quarter.

But JP Morgan cited three risks related with the gas pipeline project
-- the unavailability of funds, execution risks, and the possible
failure to obtain another major infrastructure.

The brokerage house said Bakrie Brothers is likely to form a
consortium in developing the Kalimantan-Java gas pipeline project and
one possible consortium member would be Malaysia's Petronas.

"We have not yet obtained any information on the ownership in the
consortium, however," it added.

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Indonesia's Total Persada launches IPO 
of 300 mln shares at 345 rupiah each

JAKARTA, July 19 (XFN-ASIA) - Property developer PT Total Bangun
Persada said it is launching an initial public offer (IPO) of 300 mln
shares, priced at 345 rupiah each, in order to strengthen its working
capital.

The shares represent 10.9 pct of its enlarged capital. The offer runs
from today to Friday with listing set for July 25.

PT CLSA Indonesia is acting as the lead underwriter.

Meanwhile the company said its founders will also sell a combined 550
mln shares via private placement, with the price set at the IPO level
of 345 rupiah/share. The placement shares will mean the investing
public will hold, after the IPO, a total of 850 mln shares, or 30.9
pct of paid in capital.

The founders are also willing to sell an additional 62 mln shares,
with the proceeds being allocated to help the underwriter support the
stock during the first 30 days of listing, the company said.

The firm's current shareholders are PT Total Intl Persada (a 63.4 pct
stake), PT Bumi Permata Pratama (10.3 pct), Djajang Tanuwidaja (8
pct), Komajaya (6.3 pct), Pinarto Sutanto (6 pct), and Widodo (6 pct).

Of the two largest shareholders, Total Persada will hold a 56.5 pct
stake after the IPO and private placement exercise, while Bumi Permata
will retain just a 0.9 pct stake.

The other four founders will see their stakes diluted to between 5.7
pct to 2.2 pct.

Total Bangun Persada has had 193 construction projects under
management over the past three years and in 2005 it posted net profit
of 62.12 bln rupiah, operating profit of 117.67 bln and sales of 1.16
trln..

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

The Jakarta Post
July 19, 2006

PT Indonesia Air Transport (IAT) sets 
offer price at Rp 130-150 a share 

The Jakarta Post, Jakarta

Charter airline firm PT Indonesia Air Transport (IAT), a subsidiary of the 
diversified, publicly listed PT Bimantara Citra group, plans to sell 20.19 
percent of its shares via an initial public offering (IPO) next month.

It says that the shares will be offered at a price of between Rp 130 and Rp 
150 each (between 14 and 16 U.S. cents). 

"We want to set a positive benchmark. So, the offer price will be around Rp 
130 to Rp 150, with a PE of around six times (earnings)," Bimantara Citra 
President Director Hary Tanoesoedibjo said Tuesday, as quoted by Detik.com, 
referring to the price-to-earnings ratio. 

The company expects to generate around Rp 60 billion in proceeds from the 
IPO, which will be used to finance expansion, retire debt and for working capital 
purposes. 

"Our planes are usually leased to mining firms. As the business is continuing 
to grow, we need more aircraft. So, the IPO proceeds will be used to buy new 
planes," Hary explained. 

The company plans to offer the shares on Aug. 29-31, and expects them to be 
listed on the Jakarta Stock Exchange on Sept. 6. 

IAT has appointed PT Bhakti Securities as lead underwriter for the IPO. 

IAT was established in 1968, and initially provided services to state-owned 
oil firm Pertamina and its foreign oil contractors. 

The company specializes in aero-medical evacuation, cargo, repair shop, 
third-party operation & maintenance, geophysical and aerial survey photography 
services, as well as tourist air services to more remote parts of the country. 

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

Indonesia's Lion Air may issue bonds to buy planes

JAKARTA, July 19 (Reuters) - Indonesian budget carrier Lion Air is
considering issuing bonds to finance the purchase of 60 Boeing
aircraft, an airline spokesman said on Wednesday.

The country's largest budget carrier has ordered 30 Boeing 737-900
Extended Range jetliners, in addition to the 30 it ordered last year.
The company said the total value of the deal for the 60 aircraft is
$3.9 billion.

"There's a possibility for that, we are still reviewing that option,"
Hasyim Arsal Alhabsi, a spokesman for the airline, told reporters when
asked if the company would issue bonds.

He did not say how much money the company would raise from the bond issue.

Lion Air, which operates 38 aircraft, said the size of its fleet would
grow to 44 by the end of 2006. Seven or eight of the 737-900s will
come into service in the first quarter of 2007.

Lion's chief, Rusdi Kirana, said on Monday at the Farnborough
International Airshow that the company was looking to buy some of
Boeing's mid-sized 787 dreamliners at some stage over the next five
years.

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

Indonesia businessman Gobel keen on taking over ailing Bouraq Airlines - 
report

JAKARTA (XFN-ASIA) - Businessman Rachmat Gobel, who is the chief
commissioner of PT Panasonic Manufacturing Indonesia, is keen on
taking over the ailing Bouraq Airlines, Bisnis Indonesia reported.

"I have talked to Mr. Robby Sumendap, Bouraq owner. My team has also
discussed the details (of a takeover) with Ms. Lana Sumendap (Bouraq
finance director). The response was very positive and I am serious to
get in," Bisnis quoted Gobel as saying.

The report said that Bouraq, which holds a license to serve 48 routes,
now has only two aircraft compared to the 15 before it suspended its
operations last December.

It said Bouraq has until the end of July to restart its operations,
failing which it will lose its operational license.

Gobel, who also serves as deputy chairman of Indonesian Chamber of
Commerce and Industry (KADIN), said that if his plan goes through, his
priority will be to repay Bouraq's debt to leasing and maintenance
firms.

"After the debt is settled, we will inject fresh capital to resume
operations," he said.

The report gave no financial details of the plan.

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Indonesia's Sampoerna sells subsidiaries to Sigmantara

JAKARTA, July 19 (Asia Pulse/Antara) - Publicly listed PT H.M.
Sampoerna (JSX:HMSP), one of the Indonesia's largest cigarette makers,
said it has sold its entire stakes in retail subsidiaries PT Alfa
Retailindo and PT Sumber Alfaria Trijaya to PT Sigmantara Alfindo.

Sampoerna had a 23.4 per cent stake in publicly listed Alfa Retailindo
and a 70 per cent stake in PT Sumber Alfaria Trijaya, also a publicly
listed company which holds the Alfamart franchise, Sampoerna corporate
secretary Suartini Harintho said in a report to the Jakarta Stock
Exchange.

Suartini did not disclose the value of the deal signed on July 14, 2006.

Sampoerna is 98 per cent owned by international cigarette producer
Philip Morris, which acquired it from the Sampoerna family in 2005.

Sampoerna posted net sales valued at Rp24.7 trillion (US$2.74 billion)
in 2005, up 39.7 per cent from the previous year.

Its net profit was Rp2.38 trillion, up 19.6 per cent from the year before.

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Indonesia's Nusantara Infrastructure to merge with Nusantara Konstruksi

JAKARTA, July 19 (XFN-ASIA) - Loss-making PT Nusantara Infrastructure,
formerly called PT Metamedia Technologies, is proposing a merge with
PT Nusantara Konstruksi Indonesia, an infrastructure firm based in
Makassar, South Sulawesi, as a measure to boost its earnings.

Nusantra Infrastructure said it will remain as the surviving entity
after the merger and therefore it will control Nusantara Konstruksi's
units -- toll road operator PT Bosowa Marga Nusantara and PT Bintaro
Serpong Damai.

The Bosowa Group is owned by Vice President Jusuf Kalla's
brother-in-law Aksa Mahmud, who is also deputy chairman of the
Peoples' Consultative Assembly (MPR).

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Indonesia's Tunas Financindo makes last repayment on 350 bln rupiah of bonds

JAKARTA, July 19 (XFN-ASIA) - PT Tunas Financindo Sarana, a unit of
car dealer PT Tunas Ridean, has made the last payment of 150 bln
rupiah on its 350 bln rupiah-worth of bonds issued last year, the
company said.

The 370-day bonds matured yesterday.

Tunas Financindo was established in 1989 to provide consumer financing.

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

PT Media Nusantara Citra to issue US$150mln of bonds

JAKARTA, July 19 (Asia Pulse/Antara) - PT Media Nusantara Citra (MNC),
a holding company for media and multimedia companies, plans to issue
bonds valued at US$150 million.

MNC has named Deutsche Bank as the underwriter for the bond issue, a
banker said, adding that MNC will launch a road show in the next two
weeks.

MNC is wholly owned by Bimantara Citra (JSX:BMTR) and owns 100 per
cent stake in PT Rajawali Citra Televisi (RCTI), 100 per cent stake in
PT Global Informasi Bermutu and 75 per cent stake in PT Televisi
Pendidikan Indonesia - all operators of private television
broadcasting stations.

The source said MNC will use the funds raised from the bond issue for
business expansion.

Last year, MNC posted net profit valued at Rp109 billion (US$16.6
million), down from Rp133 billion in the previous year.

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

Indonesia to import more used electric trains from Japan

JAKARTA, July 19 (Asia Pulse/Antara) - State railway company PT Kereta
Api said it will place an order for 16 units of used electric trains
from Japan.

The 16 units will be part of 160 units of used train to be imported
from Japan at a price of Rp128 billion (US$14.2 million) signed last
May.

A spokesman of PT Kereta Api Akhmad Sujadi said more units will follow
in October to a total of 24 units this year.

Some of the units will be used for the Tanah Abang - Serpong route in
which double track is being built to be completed next year.

The additional trains is expected to double carrying capacity with 120
departures from 60 departures every day .

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Indonesia's Astra Agro H1 CPO sales 476,597 tons, up 22.7 pct

JAKARTA, July 19 (XFN-ASIA) - PT Astra Agro Lestari, a unit of car
dealer PT Astra International, said its crude palm oil (CPO) sales
surged 22.7 pct during the first six months to 476,597 tons from
388,529 tons a year ago.

It said the export market absorbed 35 pct of its total CPO sales or
166, 559 tons, an increase of 58.2 pct from 105,252 tons a year ago.

It said the average selling price improved 2.3 pct to 3,351 rupiah per
kg (net) due to a 5 pct and 3.9 pct increase in the international
prices of CPO and soya oil respectively.

Astra Agro said industry-wide CPO exports are projected to reach 11.9
mln tons this year against 10.4 tons last year on the back of an
expected 11.9 pct production growth to 15.7 mln tons.

Indonesia's CPO output in the first half were mainly exported to
India, China and the Netherlands.

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Indonesia palm oil prices mixed, players on sidelines

JAKARTA, July 19 (Reuters) - Indonesian palm oil prices were mixed on
Wednesday with players mostly staying on the sidelines as they awaited
clearer price direction from Malaysia's oil palm futures, traders
said.

Crude palm oil at a local auction in Medan was traded at 4,052 rupiah
($0.438), little changed from 4,055 rupiah a kg on Tuesday.

At the state marketing centre's auction in Jakarta, CPO was traded at
4,052 rupiah a kg on Wednesday, up from 4,042 rupiah a kg on Tuesday.

"Trading is weak today, with not too many sellers offering their
stocks. Maybe they'll wait for better prices in Malaysia, before
returning to the market," said a trader in Medan.

RBD palm olein in Jakarta was quoted at betwen 4,440-4,450 rupiah a
kg, down from 4,525 rupiah a kg on Tuesday.

"There is not much to offer today, I think sellers will continue to
hold their stocks waiting for more supply," said a trader in Jakarta.

"It (tight supply) usually supports prices, but demand is also weak
today compared with the last two days so the price couldn't get any
better than that."

On Wednesday, Malaysian crude palm oil futures were mixed on lower
soyoil prices, with deferred contracts firm on expectations of
biodiesel demand.

The benchmark third-month October <KPOV6> contract on the Bursa
Malaysia Derivatives was two ringgit down at 1,553 ringgit ($422) a
tonne by lunch break.

Weakness in Malaysia's crude palm oil futures also put pressure on
export prices, with offers for August at $415 a tonne free on board
Belawan. Buyers bid at $412.5 a tonne, but no deals were reported.
There were no offers for August shipment on Tuesday.

Sellers offered October shipment at $417.5 a tonne, down from $425 a
tonne, FOB Belawan on Tuesday. Bids were seen at $412.5 a tonne
without any trade reported.

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Joyo Indonesia News Service
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