[Kabar-indonesia] 16 RI Biz/Econ Reports: Poverty; Offshore Debt; Mega Projects; Telkom; Logging

[JoyoNews at aol.com]

16 reports:

- Indonesia Press: Government's 
  Offshore Debt Burden Down
- Indonesia aims to reduce poverty
    level
- JP: Govt launches mega projects 
  in N. Sumatra 
- JP: Illegal logging rising in Jambi
- Indonesia's Telkom buys back 
  1.37 mln shares
- Bank Negara Indonesia rating outlook 
  revised to stable from positive - S&P
- Indonesia cbank: weakening rupiah 
  no cause for worry
- AIKI asks EU to lift import duties 
  on Indonesian cacao
- Indonesia's Bank Niaga lowers 
  credit expansion target
- Indonesia: Toyota to increase 
  capacity by 20%
- Bloomberg: Bank of Japan Raises 
  Rates for First Time in Almost 6 Years 
- Dow Jones: Japan Data Show Robust 
  Growth In May Exports
- Interview - Holcim Indonesia 
  sees lower 06 sales
- INACA says Indonesia isn't 
  ready for open sky policy
- JICA to encourage Japanese 
  to invest in Gorontalo, Indonesia
- Indonesia olein prices rally on 
  weak rupiah, Malaysia gains

Indonesia Press: Government's Offshore Debt Burden Down

JAKARTA, July 13 (Dow Jones)--Indonesian government's offshore debt
servicing burden is expected to fall to IDR54.7 trillion ($5.9
billion) this year from an original estimate of IDR63.6 trillion
thanks to the rupiah's appreciation against the dollar, Bisnis
Indonesia reported Friday.

"The government get benefits from the rupiah's appreciation, in terms
of offshore debt repayment, both the principle and the interest," the
newspaper quoted Finance Minister Sri Mulyani Indrawati as saying.

The rupiah has appreciated by around 6% since the end of 2005 on
short-term capital inflows.

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

Indonesia aims to reduce poverty level

JAMBI, July 14 (Asia Pulse/Antara) - The Indonesian government hopes
to reduce the current number of 36 million poor people by 50 per cent
by 2015.

Head of the food security agency of the agriculture ministry Ir Kaman
Naenggolan said here on Thursday Indonesia would have to strengthen
its food security under the national commitment to poverty
eradication.

Food security should be maintained pending this year's dry season,
because 30 out of the 165 districts in Indonesia are extremely prone
to food scarcity, while 30 others be facing food scarcity, and another
40 districts would have the capacity to meet their own needs for food.

In Jambi, only three districts are self-sufficient in their food
supplies. They are Tanjung Jabung Barat, Sarolangun and Bungo.

The province's food security council should further raise its status
of self-sufficiency in food.

Kamal explained that of the 36 million poor people in the country, at
least 68 per cent are living in the rural regions with most of them
engaged in farming.

Half of the poor in Indonesia are peasants, which means that one fifth
of the poor are farmers unable to produce food to feed their own
families.

Early this year, Indonesia with a view to promoting its food security,
asked the Center of Poverty Alleviation through Secondary Crops
Development in Asia and the Pacific (CAPSA) to play a greater role
coping with food scarcity in Indonesia, especially in the hinterlands.

This international research body (CAPSA) is expected to recommend the
results of its surveys for overcoming the food scarcity in the rural
regions.

CAPSA is an international research body under UNESCAP based in Bogor,
which specializes in research of secondary crops. As host, Indonesia
has given financial contribution to CAPSA to finance its activities,
and Indonesia's contribution in 2006 amounted to Rp1.13 billion.

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

The Jakarta Post
July 14, 2006

Govt launches mega projects in N. Sumatra 

Rendi Akhmad Witular and Apriadi Gunawan, 
The Jakarta Post, Medan, North Sumatra

photo: Building a Brighter Future: President Susilo Bambang Yudhoyono points 
to the location on the map where the 2x115 MW Labuhan Angin coal-fired power 
plant will be built, as Energy and Mineral Resources Minister Purnomo 
Yusgiantoro looks on. Yudhoyono presided over a ground-breaking ceremony Thursday for 
five new projects in North Sumatra province, including the power plant, which 
is being developed in Tapanuli Tengah regency. (JP/Apriadi Gunawan) 

President Susilo Bambang Yudhoyono launched Thursday the construction of two 
power plants, an electricity interconnection facility, and a fisheries and 
agribusiness project in North Sumatra, which are expected to help turn the 
province into a center of manufacturing, services and agribusiness activities.

"The central government is supporting the construction of economic 
infrastructure facilities in North Sumatra, with the hope that the province can become 
the main driver of economic activities in Sumatra," said Yudhoyono in a speech 
during a ceremony here. 

The first power project is the 2x115 MW Labuhan Angin coal-fired power plant, 
located in Central Tapanuli regency. The construction cost is estimated at 
more than US$201 million. 

Several export financing institutions from China will finance the project. PT 
Cimex, a joint venture between local firms and Chinese companies, has been 
selected as the contractor of the project, which is expected to be completed in 
2008. 

The second project is the 2x90 MW Asahan I hydro power plant in Toba Samosir 
regency. Financing for the project will come from the state budget and a 
Chinese investor. 

China-based Huan Gian Engineering Corporation and PT Basra Daya Sentranusa of 
Medan will act as the developer of the $250 million project, which is slated 
for completion in 2009. 

North Sumatra Governor Rudolf M. Pardede said that the projects would help 
prevent the province from plunging into a power shortage crisis in the future as 
demand for electricity has been rising. 

Rudolf also said that the government would construct a 103-kilometer power 
interconnection facility that would link supply from the northern and southern 
parts of Sumatra. Total investment for the project is estimated at $100 
million. 

Aside from the power sector projects, Yudhoyono also inaugurated the setting 
up of an agribusiness center in the highlands of Bukit Barisan area, which is 
expected to help boost the export of fruit and vegetables from the province. 

Rudol said that the center was expected to a raise a foreign exchange revenue 
of more than Rp 1.5 trillion over the next five years. 

The province's economy, which has long been driven partly by illicit 
businesses such as illegal logging, smuggling and gambling by local organized crime 
groups, is forecast to grow by more than 6 percent this year. 

With abundant marine resources, the province will also set up a fisheries 
business center, covering an area of 734,000 hectares along the province's 
coastline and small scattered islands. 

The fisheries business is expected to generate some Rp 1.01 trillion in 
foreign exchange revenue for the province over the next five years. 

Meanwhile, during his visit to Medan, Yudhoyono also handed over 500 keys of 
newly developed houses dedicated to the Acehnesse refugees who were victims of 
the Dec. 2004 tsunami in Nangroe Aceh Darussalam. 

The government has spent Rp 21.8 billion to build the houses, which stand on 
12 hectares of land. 

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

The Jakarta Post
July 14, 2006

Illegal logging rising in Jambi

JAMBI: Illegal logging in Jambi has escalated, causing the state to
suffer billions of rupiah in losses as seen in the rising number of
cases handled by the local police.

Jambi Police data indicates that the number of cases of log theft in
the province has skyrocketed from only 18 with 23 suspects in 2003 to
74 with 136 suspects in 2005.

The police also confiscated 2,998 cubic meters of wood, 28,883
illegally harvested logs, 20 trucks and a number of chainsaws as
evidence in 2005. By comparison the confiscated evidence in 2003
consisted of 2,896 cubic meters of wood, 333 logs, one tug boat and 14
trucks.

In the first half of this year, Jambi Police had processed 14 cases
involving 24 suspects with confiscated evidence consisting of 234
pieces of processed wood, 24,103 cubic meters of wood, 4,887 logs, two
tug boats, two chain saws and 52 trucks.

"However, the prosecution of the suspects is hindered by many
problems," Jambi Police officer Adj. Sr. Comr. Puji Prasethanto Hadi
said Thursday.

The problems investigators faced include conflicting regulations, he said.

"The arduous and time-consuming procedures further worsen the
situation," he said, adding there were many regulations which were in
conflict with one another.

It's better now to review the many conflicting regulations to prevent
confusion among field officials over which regulation to act on, he
added.

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

Indonesia's Telkom buys back 1.37 mln shares

JAKARTA, July 14 (Asia Pulse/Antara) - State-owned telecommunication
company PT Telkom has bought back 1.37 million shares with Danareksa
Sekuritas as the executing broker.

In a report to the Surabaya Stock Exchange, company secretary Harsya
Denny Suryo said the buyback on July 10 brought the total number of
shares bought back by the country's largest telecommunication company
to 56.81 million, including those listed on the New York Stock
Exchange.

The company is allowed to buy back up to 1 billion units of shares,
the newspaper Bisnis Indonesia reported today.

The shares were bought back at a price of Rp7,332 (US$0.81) each,
lower than the closing price of Rp7,400 the day before.

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Bank Negara Indonesia rating outlook 
revised to stable from positive - S&P

JAKARTA, July 14 (XFN-ASIA) - Standard & Poor's Ratings Services said
it has revised its rating outlook on PT Bank Negara Indonesia's (BNI)
local currency counterparty credit rating to stable from positive.

At the same time, S&P affirmed its 'B+' stable and 'B' foreign and
local currency ratings on BNI.

It said the outlook revision reflects the challenges the bank faces in
improving its key fundamentals, in particular its loan quality and
revenue growth.

BNI's loan quality had weakened as evident from its latest
first-quarter 2006 financial results, where its gross nonperforming
assets (NPAs) rose to about 16.6 pct from 14.4 pct at the end of 2005,
the ratings agency said.

'This weakening was mainly on account of an underlying weakening of
its corporate loan portfolio in a difficult operating environment due
to high interest rates and oil prices,' said S&P credit analyst Adrian
Chee.

'Going forward, however, the bank's loan quality is expected to
stabilize, benefiting in particular from the currently proposed
legislation that would differentiate state-owned banks' assets from
state liabilities and thus allowing the bank to partially write-off
some NPLs. Loan quality is also going to benefit from the bank's
internal initiatives to improve its credit risk management process,'
Chee said.

The ratings on BNI continue to be underpinned by its satisfactory
capitalization and its still-strong franchise as the third-largest
bank in the domestic banking system with a market share of 10-11 pct
of system assets and deposits.

BNI is 99.9 pct-owned by the government of Indonesia.

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

Indonesia cbank: weakening rupiah no cause for worry

JAKARTA, July 14 (Reuters) - An Indonesian central bank deputy
governor, Hartadi Sarwono, said on Friday there was "no need to be
worried" about the weakening rupiah <IDR=>. Separately, another deputy
governor of Bank Indonesia, Aslim Tadjuddin, said he saw the currency
stabilising at 9,200 rupiah per dollar.

"Weakening currencies happen across the region. It was a reaction to
higher oil price. There is no need to be worried," Sarwono told
reporters.

The rupiah lost 1.25 percent of its value as of 0552 GMT, trading at
9,205 to the dollar. It fell further to 9,215 per dollar later, as
record high oil prices and heightened global security concerns weighed
on regional currencies.

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

AIKI asks EU to lift import duties on Indonesian cacao

JAKARTA, July 14 (Asia Pulse/Antara) - Indonesia has asked the
European Union to stop discriminating against the country's processed
cacao.

The EU, which exempts African cacao products from import duty, imposes
import duties of between two and six per cent on Indonesian products.

The discrimination has made Indonesian products less competitive in
the European market, the Indonesian Association of Cacao Industry
(AIKI) said.

"Indonesian exports of cacao products totals only 30,000 tons a year
or less than 30 per cent of the country's total production of 100,000
tons a year," AIKI chairman Piter Jasman said.

"If the EU stops the discrimination, the country could increase
exports by at least 20 per cent annually," he said.

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

Indonesia's Bank Niaga lowers credit expansion  target

JAKARTA, July 14 (Asia Pulse/Antara) - Publicly listed Bank Niaga
(JSX:BNGA) has revised down its target for credit expansion as the
economic condition has not improved as expected.

The bank management earlier set target to chalk up a 32 per cent
increase in credit this year, but now the growth target has been
reduced by 10 percentage points to 22 per cent, a bank Director D.
Rompas said.

Rompas said the bank, which is 63.35 per cent owned by Malaysia's
Bumiputra Commerce Holdings Berhad (KLSE:1023), would not reach its
original target as the macro economy has not improved as expected.

He said credit expansion this year could even reach the level recorded
last year as the real sector has remained in the doldrums.

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

Automotive World
July 14, 2006

Indonesia: Toyota to increase capacity by 20%

Shortly after Daihatsu announced that it was investing US$20m to
increase capacity in Indonesia, parent company Toyota has also
announced that it would increase production capacity in the country by
20% next year.

The company's current output stands at 100,000 units per year.

Indonesia was once one of the fastest growing automotive markets in
the world, next only to China. However, sales in the country plunged
50% in the first half of this year compared to 2005. The Indonesian
automotive association Gaikindo has predicted sales of only around
370,000 to 400,000 units this year with its president stating that
even sales of 350,000 cars would be hard to achieve.

Jodjana Jody, head of sales at PT Toyota Astra Motor, believes the
full-year figure will fall short of this. "I think the realistic
target for industry sales volume this year is 300,000 units. I would
say sales volume of 330,000 units would be a challenging target," Jody
told Reuters.

Toyota remains the market leader in Indonesia with a market share of
around 35%. Mitsubishi follows at a distant second with a 14% share.

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

Bank of Japan Raises Rates for First Time in Almost Six Years 

by Mayumi Otsuma in Tokyo 

July 14 (Bloomberg) -- The Bank of Japan raised interest rates for the first 
time in almost six years, forecasting sustained growth in the world's 
second-largest economy and an end to a decade of deflation. 

Governor Toshihiko Fukui and his policy-board colleagues increased the 
benchmark overnight rate between banks to 0.25 percent from almost zero, the bank 
said in Tokyo today. 

The central bank is raising rates, still the lowest among the Group of Seven 
nations, to avoid the excesses of the 1980s bubble economy that was followed 
by a collapse in land prices and three recessions. Bonds rose and the yen fell 
as Fukui said the bank may keep rates ``very low'' to support growth driven by 
the fastest pace of corporate spending in 16 years. 

``There's a very real risk that the Japanese economy could overheat,'' said 
Glenn Maguire, chief Asian economist at Societe Generale in Hong Kong. ``We'll 
see a very gradual, sustained upward adjustment in interest rates.'' 

Sixteen central banks raised borrowing costs in June as record oil and metal 
prices fueled inflation. The U.S. Federal Reserve increased rates to 5.25 
percent from 1 percent in June 2004. The European Central Bank lifted its key rate 
to 2.75 percent, its third increase since December. 

Today's decision was unanimous. All 16 economists surveyed by Bloomberg News 
expected the move and nine of them consider today's increase will be the last 
for this year. Eight said the key rate will be capped at 0.75 percent or below 
by the end of next year. 

Second Rate Increase 

The yen traded at 116.37 against the dollar at 10:27 a.m. in New York, from 
115.39 late yesterday. Yields on Japan's benchmark 10-year bond fell 5.5 basis 
points to 1.855 percent. 

``Maintaining the zero-rate policy could cause large swings in the economy 
and prices in the future,'' Fukui said at a press conference. ``Future 
adjustment of interest-rate levels will be made gradually'' with consideration to the 
economy and prices, which the bank expects to keep rising, he said. 

The central bank has been under pressure from government officials including 
Finance Minister Sadakazu Tanigaki who are concerned that higher borrowing 
costs will hamper government efforts to stop the expansion of public debt, 
forecast to reach 151 percent of gross domestic product by March. 

A one percentage point gain in 10-year bond yields would increase the 
government's annual debt-servicing costs by 1.6 trillion yen, according to the 
Ministry of Finance. 

Corporate Burden 

The bank's decision means the end of deflation is near, said Prime Minister 
Junichiro Koizumi, speaking in Jordan. It's too early to discuss the timing of 
another rate increase, Tanigaki said today, adding that the government will 
closely watch the effect of the move. Today's decision was ``appropriate,'' 
Chief Cabinet Secretary Shinzo Abe said. 

The government opposed the bank's last rate increase in August 2000. Seven 
months later, the bank had to cut rates back to almost zero as an Internet-led 
global economic boom faltered. 

Fukui said in an interview on May 31 that the bank must ``carefully gauge the 
impact the first rate increase will have on the burden for companies'' and 
the overall economy before increasing rates again. 

The Bank of Japan on March 9 ended a five-year deflation- fighting policy of 
pumping up to 35 trillion yen ($303 billion) into the banking system. Consumer 
prices have now racked up seven months of gains, unemployment is at an 
eight-year low and lending by banks grew at the fastest pace in a decade in June. 

Car Factories 

Japan's economy expanded for 53 months through the end of June, the longest 
since 57 months of growth from 1965 to 1970. The government forecasts the 
economy will expand 2.1 percent in the year ending March 31, 2007. 

``It's a welcome sign that Japan is on the road to normality. Japan has come 
out of its deflation trip,'' said Thomas Mayer, chief European economist at 
Deutsche Bank AG in London. ``The Bank of Japan's move is a sign that this is 
clearly the case.'' 

Japan's largest companies plan to increase investment this year at the 
fastest pace since 1990, the central bank's Tankan business confidence survey showed 
last week. 

Toshiba Corp., the nation's biggest chipmaker, will build its fourth flash 
memory factory in Japan next year. The Tokyo- based company cut by more than 
half its interest-bearing debt in the past five years. 

Honda Motor Co., the nation's third-largest automaker, is constructing its 
first car plant in Japan in 30 years and Matsushita Electric Industrial Co. is 
erecting the world's biggest plasma display factory. 

Discount Rate 

``The zero-rate policy was an abnormal condition,'' said Kunio Nakamura, 
chairman of Matsushita. ``Japanese companies have made efforts to decrease debt in 
the past 10 years so many companies won't be affected by the rate hike.'' 

The bank also raised its discount rate, with which it makes overnight loans 
directly to financial institutions, to 0.4 percent from 0.1 percent. The 
decision was made by a 6 to 3 majority. Direct lending by the central bank is a last 
resort for credit for commercial banks. 

Six of seven economists, who gave their forecast for the discount rate, said 
the central bank would increase it to 0.5 percent from 0.1 percent. One said 
the rate would be raised to 0.4 percent. 

The central bank today said it will keep buying 1.2 trillion yen in 
government bonds from commercial banks, a policy tool that has been used to provide 
funds to the banking system and which has helped avoid gains in bond yields. 

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

Dow Jones Newswires
July 14, 2006

Japan Data Show Robust 
Growth In May Exports

By NATASHA BRERETON

TOKYO -- Japan's current-account surplus grew less than expected in May, but 
export growth was robust and income on overseas investments continued to rise, 
suggesting the country's balance of payments remains healthy.

The surplus grew for the first time in two months, as the value of overseas 
investments and exports overcame a bulge in the cost of imports due to soaring 
oil prices.

The current-account surplus, the broadest measure of Japan's trade with the 
rest of the world, rose 15.9% from a year earlier, before seasonal adjustment, 
to 1.614 trillion yen ($13.98 billion), Ministry of Finance data showed 
Thursday. That was slightly less than economists' average forecast of 1.673 trillion 
yen.

May's gain resulted from expansion in both the income surplus and the 
goods-and-services surplus, which got a boost from strong exports, economists said.

"Japanese net exports are growing, which is definitely a good thing for the 
Japanese economy," said Hiroshi Shiraishi, economist at Lehman Brothers in 
Tokyo. Furthermore, "in a sense, past investments are now paying off and Japan is 
benefiting" through the rise in the income surplus, he added.

The income surplus -- the net income from Japanese investments overseas -- 
expanded 15.7% from a year earlier to 1.308 trillion yen, the government said. 
Higher earnings on dividend and interest payments from foreign stocks and bonds 
lifted the surplus for a 22nd straight month, the data showed.

The data continue the recent trend of the income surplus being larger than 
the trade surplus, a sign that Japan's economy now relies more on returns from 
overseas investments as a source of income than on the sale of goods abroad.

Meanwhile, the goods-and-services surplus rose 25.2% from a year earlier to 
399.6 billion yen, as the services deficit contracted 42.4% and the trade 
surplus grew 6.9%, a government official said.

High global oil prices inflated the value of imports by 20.1% from a year 
earlier to 4.972 trillion yen. Crude-oil cost $66.44 a barrel in May, up 29.8% 
from a year earlier, the government data showed.

Exports grew a robust 18.8% from a year earlier to 5.439 trillion yen, 
marking the 30th consecutive month of expansion, as Japanese firms sold more cars, 
nonferrous metals and construction and mining equipment overseas.

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Interview - Holcim Indonesia sees lower 06 sales

By Harry Suhartono

JAKARTA, July 14 (Reuters) - The chief of PT Holcim Indonesia Tbk ,
the country's third largest cement maker, said on Friday the firm's
2006 sales could be up to 14 percent lower than last year due to a
slowdown in the construction sector.

However, Tim Mackay, CEO and president director of Holcim Indonesia, a
unit of Holcim Ltd. , said overall industry sales were likely to be
only 0.5-1.0 percent lower than last year, depending on the pace of
recovery in the second half of this year.

Mackay told Reuters in an interview overall industry sales volumes
were down 5.6 percent year-on-year in the first half of 2006 and he
would be happy if the industry ended up with zero percent growth this
year.

"If we achieve zero cement industry growth overall in 2006, I would be
pleased. Of course, I would like more, but if we have zero growth this
year it would be OK in the circumstances. I think next year's growth
in the industry would be pretty small."

Indonesia's cement consumption has been falling with the economy
slowing due to weak purchasing power and high interest rates after a
government decision to sharply raise fuel prices last October.

Indonesia consumed 31.5 million tonnes of cement last year, but this
year's sales are seen down because several infrastructure projects yet
to take off.

Holcim's cement and clinker sales last year stood at 6.6 million tonnes.

"2006 is the year of correction ... It will establish a more
realistically sustainable path of the future," Mackay said when asked
about the prospects of Southeast Asia's largest economy.

Holcim controls about 13 percent of the Indonesian cement market, down
from 15 percent by the end of 2005, with players in the industry
engaged in a fierce price war. But the company is aiming to have a 17
percent share by the end of 2007.

Mackay said prices had declined by about 25 percent since the price
wars started and the industry had lost millions of dollars.

"I would be surprised if it went for another six weeks," Mackay said,
responding to a question on how long he expected the price war to go
on.

Holcim posted a net profit of 219.9 billion rupiah ($24.16 million) in
the first quarter of this year, compared with a 138.9 billion net loss
in the same period last year.

Holcim Indonesia's shares were down 1.88 percent in afternoon trade in
line with the broader market <.JKSE> which was down 1.6 percent.

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INACA says Indonesia isn't ready for open sky policy

JAKARTA, July 14 (Asia Pulse/Antara) - The Indonesian National Air
Carriers Association (INACA) has urged the government to reject an
call by Singapore to adopt an open sky policy for cargo carriers in
December, 2006.

INACA secretary general Tengku Burhanuddin said Indonesia is not ready
for open competition in December.

"Adoption of the policy will kill the country's air cargo transport
companies as the country has no freighters to compete (with) foreign
rivals especially from Singapore," Burhanuddin said.

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JICA to encourage Japanese to invest in Gorontalo, Indonesia

GORONTALO, July 13 (Asia Pulse/Antara) - The Japan International
Cooperation Agency (JICA) said it would help the Gorontalo
administration lure more Japanese investors to the maize-producing
province, the agency's adviser Shinobu Umeda said here yesterday.

"This year we were planning to study the potentials of Gorontalo
because the province has a very favorable investment climate," Umeda
noted.

"The fishery sector, including seaweed cultivation, has attracted
Japanese investors," he said, adding that he would visit the seaweed
cultivation center in Teluk Kwandang on Friday.

In the meantime, Mahendar Siregar, deputy to the coordinating minister
for economy, said his office would cooperate with JICA in promoting
Gorontalo in international business affairs.

"However, before giving more information to the prospective investors,
we should first study what sort of commodities have a comparative edge
compared to those in other provinces," Mahendar said.

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Indonesia olein prices rally on weak rupiah, Malaysia gains

JAKARTA, July 14 (Reuters) - Indonesian cooking oil prices rallied on
Friday boosted by gains in Malaysia crude palm oil futures and the
weakening of the rupiah against the U.S. dollar, traders said.

But crude palm oil prices barely moved with players staying on the
sidelines, waiting for prices leads from Malaysia crude palm oil
futures next week.

RBD palm olein in Jakarta traded at between 4,380 and 4,385 rupiah
($0.477 and $0.478) a kg, up from 4,320 rupiah a kg on Thursday.

"Malaysia gained a lot and the rupiah is also weakening, that
supported prices. But demand is also ample because buyers are
returning to refill stocks," said a trader in Jakarta, adding that 300
tonnes of cooking oil changed hands.

Malaysian crude palm oil futures closed higher on Friday, fuelled by
record high crude oil prices but gains were capped by lack of demand.

The benchmark third-month September <KPOU6> contract on the Bursa
Malaysia Derivatives ended up seven ringgit at 1,498 ringgit ($408) a
tonne.

Late on Friday, the rupiah was quoted at 9,170 rupiah per dollar
compared to 9,100 rupiah on Thursday. A weaker rupiah makes the
commodity -- traded in dollars -- more expensive in local currency
terms.

While cooking oil prices gained, trading was lacklustre for crude palm
oil. There were no local auctions in Medan, the capital of North
Sumatra province and a key port for palm oil.

The state marketing centre in Jakarta which sells palm oil from state
plantations also did not hold any palm oil auctions.

"It's Friday. Most sellers are waiting until next week to watch how
prices will be," said a trader in Medan.

Gains in Malaysia crude palm oil futures also prompted sellers to
raise export offers.

July shipment was offered at $405 a tonne, up from $397.5 a tonne on
Thursday, free on board Belawan. Buyers bid at $395 a tonne, but no
deals were reported.

Sellers offered August shipment at $407.5 a tonne, free on board
Belawan, up from between $402.5 and $405 a tonne on Thursday. Bids
were seen at $402.5 a tonne without any trades were reported.

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Joyo Indonesia News Service
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