[Kabar-indonesia] 21 RI Biz/Econ Reports: Financial Sector Strengthening Plan; 4.59% GDP; Doha

[JoyoNews at aol.com]

21 RI Biz/Econ Reports:

- Indonesia Unveils Financial Sector 
  Strengthening Package
- Indonesia Trade Minister: Doha 
  Round Talks In "Crisis Mode"
- Indonesia Finance Min: 1H 2006 GDP
    Likely +4.59% On Yr
- Indonesia H1 actual excise tax receipts
    exceed target - official
- Indonesia parliament approves scrapping
    commodities tax
- Indonesia seeks debt swap deal from
    Germany
- Indonesian govt may review plan for 13th
    salary to state official
- Bank Indonesia awards 54.62 trln rupiah 
  1-mth SBIs at fixed rate 12.50 pct
- Bank Intl Indonesia Ups Stake In
    WOM Finance To 47%
- Moody's review Bank Rakyat Indonesia's
    rating for possible upgrade
- Indonesia's Excelcom says interested in
    IDD licence
- CLSA raises Indofood to underperform
   from sell
- Indonesia's Arpeni to invest US$132 mln 
  to buy more ships
- Indonesia approaches two global cos to
    invest in auto sector
- Indonesia approves Lafarge's 450 mln usd
   capacity expansion plan in N Sumatra
- SMEs account for only 14.76 pct of
    Indonesia's exports: Yudhoyono
- Indonesia Press: Korean Co Wants To
    Build Rempang Shipyard
- Indonesia introduces legislation to
    revive fishing sector
- Indonesia's London Sumatra gets govt 
  nod for 91.29 mln usd plantation expansion
- Indonesia fails to sell 2,500 T palm oil in
    export tender
- Indonesia palm oil bearish, players
    sidelined

Indonesia Unveils Financial Sector Strengthening Package

JAKARTA, July 5 (Dow Jones)--Indonesia's government unveiled a policy
package late Wednesday designed to strengthen the financial sector
through measures including cuts in state-bank bad loan burdens, the
launch of Islamic government bonds and the acceleration of state-firm
privatization.

The centerpiece of the policy package, which consists mostly of a
timetable of pending regulatory changes, is a plan to boost state
banks' ability to recover nonperforming loans.

"This is what (the state-owned banks) need," Minister of Finance Sri
Mulyani Indrawati told reporters at a press briefing.

"State-owned banks will have the same status as domestic commercial
banks in resolving nonperforming assets."

Coordinating Minister for the Economy Boediono and Bank Indonesia
Governor Burhanuddin Abdullah also attended the policy initiative
launch.

The policy package calls for the issuance of a regulation by the end
of July that will allow state-owned banks to negotiate directly with
debtors for the reduction and recovery of bad loans.

Current regulations which classify state-owned banks' loan portfolios
as state assets are a major impediment to accelerating the removal of
bad debts from the books of state-owned banks.

The most recent central bank data indicates nonperforming loans were
5.3% of total domestic commercial lending, Bank Indonesia Deputy
Governor Siti Fadjrijah said in May. The central bank has a target of
5.0% average net NPLs for the bank sector in 2006.

But large state-owned banks have accumulated much larger bad debt
burdens than domestic commercial banks due to what analysts describe
as a history of inadequate risk management practices.

The bad loans of Bank Mandiri (BMRI.JK), the country's largest bank by
assets, hit IDR17.77 trillion in the first quarter of 2006, more than
double the IDR6.42 trillion in the year-earlier period.

The government doesn't have any immediate plans to set up a special
vehicle to speed up the reduction of state bank NPLs, but hasn't ruled
out the idea, Boediono said, without elaborating.

The government also plans to accelerate bank mergers the statement said.

Bank mergers are already a key component of the Indonesian Banking
Architecture, a 10-year master plan the central bank launched in 2004
to promote bank sector consolidation and raise corporate governance to
international levels.

Bank Indonesia will provide details of the bank sector consolidation
plan at a press conference Thursday.

The statement said the government plans to issue regulations in
December 2006 to allow the establishment of a primary dealer system
for government bonds.

In September the government will submit to parliament for approval a
draft regulation allowing the issuance of Islamic, or Shariah, bonds,
the statement said, without elaborating.

Islamic bonds conform with Shariah, the legal code of Islam, which
prohibits interest payments. They are usually structured either as
zero-coupon bonds and sold at a discount, or pay a profit in the form
of regular payments derived from some underlying asset, such as
rentals from property.

The Indonesian government of Susilo Bambang Yudhoyono has previously
expressed interest in launching Islamic bonds through the conversion
of existing local government bonds to Shariah standards.

Mulyani said she hoped that the government will begin to issue Shariah
bonds sometime in 2007, without providing a precise timetable.

The statement said that the government will form a committee in August
to draw up a blueprint for prioritizing the privatization of
state-owned firms. The blueprint should be completed in November, it
added.

The government's policies to strengthen the financial sector also
include a plan to get shareholders of the Surabaya and Jakarta stock
exchanges to agree to a merger by October and a scheme to hasten the
market exit of "unhealthy" insurance companies, the statement said,
without elaborating.

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Indonesia Trade Minister: Doha Round Talks In "Crisis Mode"

JAKARTA, July 5 (Dow Jones) -- The Doha Round of talks to liberalize
trade under the World Trade Organization are in "crisis mode," and
could fail unless the U.S. and the European Union make concessions on
agricultural subsidies and market access, Indonesia's Minister of
Trade Mari Elka Pangestu told Dow Jones Newswires on Wednesday.

"Until we break the deadlock I suppose we are in crisis mode," she
said, adding that for the talks to succeed, there needs to be a
"breakthrough" between Europe and the U.S.

"Europe has to deliver on market access (for agricultural products)
and says it's willing to do so if the U.S. delivers on (reduced farm)
subsidies."

Because the two sides haven't staked out their positions in detail,
Pangestu said developing countries were unwilling to engage in
substantive negotiations at ministerial talks in Geneva last week.

"The developing countries perspective (is) we don't know how much
flexibility we want to request until we know what market access
requirements we're going to be asked to commit ourselves to," she
said.

Last week, World Trade Organization Director-General Pascal Lamy also
warned that the failed meeting of 60 trade ministers in Geneva was the
last realistic chance to agree to lower trade barriers.

Indonesia coordinates the Group of 33 developing countries, or G-33, a
45-member trade block dedicated to protecting the agricultural sectors
of developing nations from the potentially harmful removal of existing
import tariff barriers.

But Pangestu said there is still time and opportunity for developed
nations to express the political commitment needed to salvage the Doha
Round.

"It looks pretty bad ... but we shouldn't be too discouraged because
negotiation rounds such as the Uruguay Round were filled with crises,
and crises often tend to generate action," she said.

The Doha round was launched in November 2001 in Doha, Qatar, where the
world's richest countries agreed to liberalize trade in services,
manufacturing and agriculture to create opportunities for developing
countries and the poor.

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Indonesia Finance Min: 1H 2006 GDP Likely +4.59% On Yr

JAKARTA, July 5 (Dow Jones)--Indonesia's economy likely expanded 4.59%
during the first half of the year from the same period last year. For
the full year, the economy is expected to grow 5.9%, Finance Minister
Sri Mulyani Indrawati said Wednesday. The first-half economic growth
prediction would be significantly lower than the 6.3% on-year growth
during the first half of 2005. [ 05-07-06 0714GMT ]

Rising fuel prices have stoked inflation and contributed to higher
interest rates, weighing on Indonesia's economic growth since the last
quarter of 2005.

The government, however, predicted sunnier days to come.

"Indonesia's economy during the second half of the year is predicted
to improve as inflation is expected to ease, which will be followed by
a gradual reduction in interest rates...," Mulyani said in a written
report on the government's first-half budget submitted to parliament.

The government expects the annualized inflation rate to ease to 8% at
the end of the year from 15.53% in June.

Mulyani said the government raised IDR243.32 trillion ($26.7 billion)
in revenues during the first half of the year, and spent IDR246.78
trillion. Thus, it recorded IDR3.46 trillion deficit during the
January-June period.

The government projected the full-year deficit to reach IDR37.63 trillion.

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Indonesia H1 actual excise tax receipts exceed target - official

JAKARTA, July 5 (XFN-ASIA) - Actual excise tax receipts in the first
half of this year amounted to 17.64 trln rupiah, slightly higher than
the target of 17.50 trln for the period, said Frans Rupang, the
finance ministry's excise director.

He said cigarettes contributed nearly 97 pct of the actual excise
receipts during the period.

The government has raised the full-year excise tax revenue target to
38.5 trln rupiah from an initial forecast of 36.5 trln, he told
reporters.

The excise tax was partly boosted by a 10 pct increase in the minimum
retail price for cigarettes, effective from April 1. The minimum price
is the base price for excise tax calculation.

As for import tax receipts, he said actual receipts during the first
half reached 5.44 trln rupiah against a target of 7.94 trln.

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Indonesia parliament approves scrapping commodities tax

JAKARTA, July 5 (Reuters) - Indonesia's parliament has approved a plan
to scrap a 10 percent value-added tax on primary commodities in a bid
to boost domestic processing industries, the trade minister said on
Wednesday.

The removal of the 10 percent value-added tax on primary commodities
is part of the government's incentive package to cushion the impact of
a fuel price increase last October on farmers and the industry.

The tax applies to primary commodities sold to domestic processing industries.

"The tax removal must be discussed with parliament because it will
affect the state budget. But parliament has approved it," trade
minister Mari Pangestu told reporters.

"It still has to wait for a regulation from the Ministry of Finance," she 
said.

Pangestu said the removal of the VAT would be effective from Jan. 1,
2006 once the finance ministry issued detailed guidelines.

She did not say which commodities would be exempt from the tax. One of
processing industries that is expected to benefit from the VAT removal
is the cocoa grinding industry.

The tax, which was imposed in 2000, has led to shortages of raw
material for cocoa grinders as dealers prefer to sell cocoa beans
overseas to avoid the tax.

Indonesia, Asia's second-largest cocoa grinder after Malaysia, has 12
grinders with a capacity to process 283,000 tonnes of cocoa beans a
year. But they only run at half the capacity due to lack of raw
material.

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Indonesia seeks debt swap deal from Germany

JAKARTA, July 5 (Xinhua) -- The Indonesian government will for the
third time request Germany to swap a debt of 25 million Euros into
forest and ecological conservation program, a newspaper reported
Wednesday.

The government has earlier submitted two similar proposals with
roughly the same amount of debts.

The previous proposals sought to swap debts into education programs,
reported Bisnis Indonesia, quoting an official with the Ministry of
National development Planning.

"The proposal is being prepared, then we will wait response from
Germany," said Lukita Dinarsyah Tuwo, deputy minister in charge of
development financing.

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Indonesian govt may review paln for 13th salary to state official

JAKARTA, July 5 (Asia Pulse/Antara) -- The government may exclude
state officials from its plan to pay civil servants their 13th salary
this year, National Development Planning Minister Paskah Suzetta said
here Wednesday.

"The plan to give the 13th salary to civil servants, police and
military personnel will not be reviewed but that part of the plan
affecting state officials will, if necessary," Paskah said.

He said the measure needed to be taken because of limited funds.

"The problem in giving the 13th salary to state officials is that they
already enjoy all sorts of facilities," Paskah said, adding that
although the government regulation about payment of the 13th salary
had already been issued, it could be reviewed on the ground of limited
funds.

Finance Minister Sri Mulyani Indrawati had said earlier that the
government regulation has been issued.

Meanwhile, the Finance Ministry`s State Treasury Director General
Mulia T. Nasation said the government had drawn up a budget of Rp18
trillion (US$2 billion) for payment of the extra salary and Rp1
trillion of the amount was allocated for state officials' 13th salary.

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Bank Indonesia awards 54.62 trln rupiah 1-mth SBIs at fixed rate 12.50 pct

JAKARTA, July 5 (XFN-ASIA) - Bank Indonesia said it has awarded 54.62
trln rupiah worth of Bank Indonesia Certificates (SBI) at a fixed rate
of 12.50 pct.

The 1-month SBI rate is pegged to the benchmark policy rate called the BI 
rate.

Most analysts polled by XFN-Asia expect the central bank to cut the BI
rate by 25-50 basis points at tomorrow's rate decision meeting.

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Indonesia's BII says raises stake in WOM Finance

JAKARTA, July 5 (Reuters) - Indonesia's sixth-largest lender, PT Bank
Internasional Indonesia Tbk (BII) , said on Wednesday it had increased
its stake in a subsidiary, PT Wahana Ottomitra Multiartha Tbk (WOM
Finance), by 3.99 percent.

BII bought the stake from International Finance Corporation (IFC), a
subsidiary of the World Bank, but did not disclose the amount it paid.

After the purchase, BII owns 46.99 percent of WOM Finance ,
Indonesia's third largest motorcycle financing company, with a market
capitalisation of $95.13 million.

BII is controlled by a consortium that consists of South Korea's
Kookmin Bank , Singapore state investment arm Temasek Holdings
[TEM.UL] and Britain's Barclays Plc .
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Bank Intl Indonesia Ups Stake In WOM Finance To 47%

JAKARTA, July 5 (Dow Jones)--PT Bank Internasional Indonesia (BNII.JK)
has increased its stake in consumer financing company PT Wahana
Ottomitra Multiartha (WOMF.JK) to 46.99% from 43% previously.

In a press release, BII said that it bought the shares from the World
Bank's investment arm International Finance Corporation, or IFC.

It didn't disclose the value of the transaction.

"Investment in WOM Finance is in line with our strategic initiatives
to sustain our growth in the consumer market...," said Prem Kumar,
BII's chief finance officer.

Temasek Holdings Pte. Ltd.(TEMAH.YY), Singapore's state-owned
investment company, owns around 28% of BII indirectly, and South
Korea's Kookmin Bank (060000.SE) holds around 14%, with the remaining
shares owned by the public.

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Moody's review Bank Rakyat Indonesia's rating for possible upgrade

SINGAPORE, July 4 (Asia Pulse/Antara) - Moody's Investors Service has
placed Bank Rakyat Indonesia's (BRI) (JSX:BBRI) D- bank financial
strength rating (BFSR) on review for possible upgrade.

All other ratings are unaffected.

"The review will consider BRI's improving financial fundamentals,
arising from its focus on its core micro-lending, SME and consumer
businesses," Moody's VP/Senior Analyst, Beatrice Woo, said in a
statement today.

"Specifically, the bank enjoys the highest net interest margin of its
peer group, above-industry average asset quality, and sufficient
capital to absorb the potential risks evident on its balance sheet."

"In the longer term, BRI faces the challenge of protecting its market
share as other banks attempt to penetrate the micro and retail
segments," says Woo, Moody's lead analyst for BRI.

She said the bank has upgraded its risk management systems as well as
its internal controls and process to create a platform for growth and
to help maintain its market position.

However, the enforceability of these measures is particularly
difficult, given the sprawling operating network that it maintains.

Another credit risk is that BRI conceivably remains vulnerable to
political pressures, Moody's said.

The government had been its sole shareholder until an initial public
offering in November 2003, but is still the majority shareholder with
a 58.16 per cent stake.

Established in 1895, Bank Rakyat Indonesia's primary role is to
promote the country's microfinance and SME sectors.

It is now Indonesia's fourth largest bank in terms of assets and
deposits. It holds about 14 per cent of its assets in government
recapitalization bonds, 68 per cent of which are fixed rate.

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Indonesia's Excelcom says interested in IDD licence

JAKARTA, July 5 (Reuters) - Indonesia's third largest mobile phone
operator, PT Excelcomindo Pratama TYb, said on Wednesday it plans to
seek a licence from the government to provide direct international
calling services.

The Indonesian government is studying plans to allow a third player
into the direct international call services market in competition with
two existing operators, PT Indosat Tbk and PT Telekomunikasi Indonesia
Tbk .

"We are interested in getting the licence, but it is purely as an
effort to improve the quality of our services to our customers,"
Rudiantara, a director of Excelcomindo , told reporters on the
sidelines of a cellular exhibition.

He said the international direct dialing (IDD) business was no longer
as attractive as it was several years ago because many operators now
provide the service through the voice-over-internet-protocol system,
which is cheaper than conventional IDD.

Rudiantara said the company had no details on how much money it would
spend because the government had not provided any details about the
licence offering.

"We just want to make sure that foreigners who come to Indonesia and
use our networks can enjoy good quality when they are making calls
abroad," Rudiantara added.

Telekom Malaysia Bhd has a majority control in Excelcom, which had 8.2
million users in the first quarter out of the total of 50 million
mobile phone users in the country.

Industry experts expect the number of users in the fourth most
populous nation, home to 220 million people, to reach 100 million by
2010.

Despite the strong growth rate in the subscriber base in the past few
years, the 21 percent penetration rate in Indonesia is still low
compared with regional peers such as Malaysia's 80 percent and
Thailand's 49 percent.

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CLSA raises Indofood to underperform from sell

JAKARTA, July 5 (Reuters) - CLSA has upgraded the world's largest
instant noodle maker, PT Indofood Sukses Makmur Tbk , to underperform
from sell and raised its target price to 900 rupiah ($0.1) per share,
the brokerage said late on Tuesday.

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Indonesia's Arpeni to invest US$132 mln to buy more ships

JAKARTA, July 5 Asia Pulse - Shipping company PT Arpeni Pratama Ocean
Line (JSX:APOL) plans to develop its fleet by purchasing used ships
with an investment of US$132 million until July 2007.

APOL director Ronald Nangai in his report to the Jakarta Stock
Exchange said the additional ships will be used to serve some
steam-powered electricity plants in the country. The entire investment
will be financed from loans.

He said the plan was made after the company won a long-term contract
to transport coal for the electricty plants.

The investment includes the purchasing of 1-4 drybulk ships, two
general cargo ships, 1-3 floating crane ships, and 10 tug boats.

This plan will be presented in the company's shareholder meeting
scheduled for July 28.

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Indonesia approaches two global cos to invest in auto sector

JAKARTA, July 4 (Asia Pulse/Antara) - The Indonesian government is
approaching two multinational companies in the automotive sector to
invest in the country by offering them some incentives, Minister of
Industry and Trade Fahmi Idris told the House Commission VI here on
Monday.

Fahmi refused to disclose the two companies, arguing they were also
being approached by Thailand.

One of the companies, he said, will invest nearly US$1 billion and the
other one will pour US$700 million.

"Both of them have decided to invest this year," Fahmi said.

For that reason, he tried to attract the two investors to enter into
the country's automotive industry with some incentives that were being
prepared by the government in the new investment regulation.

He said that as a close competitor, Thailand has more supporting
industries. However, Indonesia offers more incentives to investors as
well as a its larger domestic market and more flexible foreign
exchange policy.

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Indonesia approves Lafarge's 450 mln usd capacity expansion plan in N Sumatra

JAKARTA, July 5 (XFN-ASIA) - The National Investment Coordinating
Board has approved Lafarge SA's proposal to expand cement production
capacity at its North Sumatra subsidiary PT Semen Andalas at an
investment cost of 450 mln usd, the board's chairman Mohamad Lutfi
said.

Lutfi said the Semen Andalas project was among largest foreign direct
investments (FDIs) approved in June, prompting a large jump in FDI
approvals for the second quarter.

Lafarge earlier said it has secured a 30 mln usd bridging loan from
Citigroup Inc to reconstruct its Indonesian plant in Aceh which was
damaged by the December 2004 tsunami.

Lutfi did not say whether a portion of the French firm's proposed
investment will be used to repair the damaged Semen Andalas plant.

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SMEs account for only 14.76 pct of Indonesia's exports: Yudhoyono

JAKARTA, July 5 (Asia Pulse/Antara) - President Susilo Bambang
Yudhoyono said small and medium-scale entrepreneurs (SMEs)` exports
were still lagging behind those of big businesses, accounting for only
14.76 percent of overall exports compared to 83.24 percent contributed
by big businesses.

The President 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," President Yudhoyono said when opening an exhibition of
primary products of UKM and cooperatives at the Sme`sco Promotion
Center (SPC) here on Wednesday.

He said in the context of Indonesian business 2006, excluding the
agro-business sector, the micro and small scale businesses were
recorded at 19.3 million units or 77.7 percent, medium-sized
businesses 5.2 million units or 21 percent and large scale ones
500,000 units or about two percent.

If they were viewed from the export structure in 2005, the small and
meidum scale businesses contributed only 14.76 percent, far smaller
than the large scale exports which reached 85.24 percent.

The President said that though the market potential at home was big --
seeing the large number of 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.

Yudhoyono said that many UKM products had good quality and could
compete in the market but they were facing the gap of their market
potential and their ability to promote their products.

On the other hand, the President said, the Indonesian people
themselves also did not appreciate too much 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.

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Indonesia Press: Korean Co Wants To Build Rempang Shipyard

JAKARTA, July 4 (Dow Jones)--South Korea's Dae Joo is interested in
investing $500 million in a shipyard project on Riau Islands
province's Rempang Island, Bisnis Indonesia reported Wednesday.

However, the head of Riau Islands' investment board said the
provincial government is suggesting the company build the facility on
Karimun Island, which it says is surrounded by deeper water more
suitable for a shipyard, the newspaper reported.

The investment board official was quoted as saying that the provincial
government is still studying Dae Joo's proposal.

He said that, if approved, the shipyard would be built on a 1,000-hectare 
site.

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Indonesia introduces legislation to revive fishing sector

JAKARTA, July 5 (Asia Pulse/Antara) - Indonesia needs almost 700
fishing boats meauring 100-300 tons to revive its fishing industry
following the termination of its foreign fishing operation licensing
system, a fisheries ministry official said here on Tuesday.

Sunoto, director of fish catching industry development at Marine
Resources and Fisheris Ministry said as many as 668 foreign vessels
operated in the country under the licensing system.

"After the system was terminated more vessels are needed to strengthen
the national fishing fleet to maximize production," he said at a
seminar on development of fishing industry in the Natuna and South
China seas.

The Indonesian government in December last year stopped fishing
cooperation with the Philippines. This year it will stop cooperation
with Thailand and later in 2007 with China.

He said foreign companies wishing to continue fishing operations in
Indonesia now had to invest in the nation's fish processing industry
and use their catch as raw materials.

"Unless the national fleet is strengthened it would be difficult for
domestic fish processing industry to get raw materials," he said.

He said that only 26 to 30 out of 50 fish canning and processing
industries were at currently operating and these were not utilising
their full capacity due to a shortage of raw materials.

The president director of fish canning firm PT Asi Pudjiastuti, Susi
Pudjiastuti, meanwhile said she supported the government's decision to
terminate the license system.

"The policy would help boost fishing industry in Indonesia," she said.

She said many foreign fishing companies had so far enjoyed operating
in Indonesia, but had stretched existing fish stocks and returned
little to the country.

She said foreign vessels had thronged to Indonesian waters to take the
advantage of the nation's weak fishing regulations.

"The whole world is looking to Indonesia because it is the only
country that has no regulations in the field of fish catching," she
said.

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Indonesia's London Sumatra gets govt nod for 91.29 mln usd plantation 
expansion

JAKARTA, July 5 (XFN-ASIA) - Crude palm oil (CPO) producer PT London
Sumatra has been granted approval by the National Coordinating Board
(BKPM) to expand its plantation size at an investment cost of 91.29
mln usd, National Investment Coordinating Board (BKPM) chief Mohamad
Lutfi said.

He said PT London Sumatra plans to expand its palm oil plantations in
the Lahat Regency in South Sumatra province; in the West Kutai Regency
in East Kalimantan province; in Banyuasin, South Sumatra province; as
well as in Minahasa in North Sulawesi.

The company's expansion project was 'the among large investments' that
were approved in June, Lutfi said at a press conference.

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Indonesia fails to sell 2,500 T palm oil in export tender

JAKARTA, July 5 (Reuters) - Indonesia's state marketing centre
rejected bids for 2,500 tonnes of crude palm oil offered at an export
auction as buyers offered lower prices, the centre's official said on
Wednesday.

The centre, which sells palm oil from state plantations, offered 2,500
tonnes of CPO at $407.5 a tonne, free on board Belawan and Dumai, the
official said.

The highest bid for was $400 a tonne, FOB Belawan and Dumai.

Last month, the centre sold 2,500 tonnes of CPO for export at $391 a tonne.

The centre did not hold any CPO auction for the local market on Wednesday.

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Indonesia palm oil bearish, players sidelined

JAKARTA, July 5 (Reuters) - The Indonesian palm oil market has turned
bearish, with players mostly on the sidelines as they await clearer
price leads, traders said on Wednesday.

Palm oil prices edged lower despite a weakening rupiah against the
dollar as players were reluctant to take positions.

At a local auction in North Sumatra's Medan, crude palm oil was quoted
at 3,880 rupiah ($0.427) a kg, down from 3,885 rupiah.

"The market is quiet today. Buyers are not interested...They may have
ample palm oil stocks," said a trader in Medan, the capital of North
Sumatra and Indonesia's key port for palm oil exports.

The Indonesian rupiah stood at 9,115 per dollar late on Wednesday
versus 9,060 rupiah on Tuesday.

RBD palm olein in Jakarta fell to 4,275 rupiah from 4,290 on Tuesday,
with some 500 tonnes of cooking oil changing hands.

On the exports front, offers for July shipments stood at $392.5 a
tonne, free on board Belawan and buyers bid $387.5. No deals were
reported.

Offers for August shipment stood at $397.5. Buyers bid at $392.5, but
no deals reported.

"Export demand is still slow. But prices may rise in the next days as
demand from China and Europe is expected to pick up," said a trader in
Jakarta.

Also on Wednesday, the state marketing centre failed to sell 2,500
tonnes of CPO in an export auction due to low bids.

The centre which sells palm oil from state plantations offered CPO at
$407.5 a tonne, free on board Belawan and Dumai. Buyers bid at $400.

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Joyo Indonesia News Service
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