10 August 2012 05:10 [Source: ICIS news]
By Andrea Heng
The buy-sell gap started to widen during the week of 22 June, when buyers started indicating softer prices at around $920-950/tonne (€745-770/tonne) FOB (free on board) southeast (SE) Asia, in line with a decline in feedstock prices, according to data from ICIS.
However, sellers remained firm in their indications at $1,010/tonne
“It is impossible for me to sell anything below $1,010-1,030/tonne
Feedstock crude palm oil (CPO) prices were at the mid Malaysian ringgit (M$) 3,000s/tonne (around $965/tonne) FOB
The CPO prices hovered at this level throughout July.
From late June through July, the buy-sell gap prevailed as sellers were unable to offer cargoes of 80/20 soap noodles - which goes into making of soap bars - at below $1,000/tonne
“The volatility in the feedstock market is not helping the situation. Buyers keep quoting lower numbers the instant they see a drop in CPO prices, but they fall silent when we quote our selling ideas when CPO prices rise again,” another southeast Asian producer said.
However, the price gap narrowed slightly during the week ended 3 August to be assessed at $950-980/tonne
Buyers are not in a hurry to purchase because of ample inventories, so they were able to hold on to their lower indications and even purchase in small quantities.
Despite the narrowed buy-sell gap, players believe trade will remain limited during the fourth quarter as buyers continue to push down prices, with some testing the market with bids at below $900/tonne
“It will be difficult for producers to sell below their current levels at $980-990/tonne
($1 = €0.81, $1 = M$3.11)
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