"Domestic stocks are still abundant, I think buyers are buying in large quantitiy because they know the market will be closed during and after the celebration," said one Jakarta-based trader.

Olein was quoted at around 3,500-3,600 rupiah/kg in Jakarta against 3,400-3,500 rupiah/kg on the previous day.

Traders prices usually go up in the lead-up to Eid-al Fitr and had also been boosted this week by expectations that the government would lower export taxes on CPO and its by-products.

The government has said it would lower the export tax on CPO in January to 40 per cent from 60 per cent.

But on Tuesday, minister of finance Bambang Subianto said the government would lower the taxes at "the right time" without giving a specific time frame, causing confusion amongplayers.

Most traders say 40 per cent is the most suitable rate for the new CPO export taxes because that would still make domestic selling attractive.

The government has been under strong pressure from producers to cut the taxes to allow them to ship CPO overseas rather than continue to try sell their product in the already flooded domestic market.

CPO taxes are at 60 per cent while taxes on by-products such as refined, bleasched, dedorised (RDB) palm oil and olein are 55 per cent and crude palm kernel oil 50 precent.