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Asia coconut oil: Prices to move in narrow range

MANILA: Rotterdam coconut oil prices are likely to move within a $10 range this week as slow demand balances the tightness in supply, traders in Manila said on Monday.

Coconut oil was traded at $685 per tonne CIF Rotterdam last Friday.

"At the moment, supply is still tight but consumers are still not buying so there's some sort of balance ," a trader said.

"We'll probably be moving in a $10 range this week, while players continue to make an assessment of the market as they come from the holiday break."

Demand for coconut oil from Europe has been slack with the December shipment providing ample supply.

Another trader said the market was waiting for favourable prices to come with the easing of the supply crunch.

"They do not like to pay the premium for near buying," he said. "They are trying to make do with what they have and also they are expecting some improvement in production."

Rains in the last quarter in the Philippines, one of the world's top coconut oil exporters, have hampered the production of copra, from which coconut oil is extracted.

But going forward, Philippine coconut production is expected to improve 45 percent to 1.957 million tonnes in copra terms in 2000 from an estimated record low of 1.35 million tonnes in 1999.

This should bring down coconut oil prices by the second quarter, traders said.-Reuters