MANILA (Dow Jones)--World coconut oil prices were offered higher this week on
continued tight copra supply in the Philippines and spill-over support from the
trendsetting palm and soy oil markets, trade participants said.

  Despite higher prices this week, coconut oil prices are likely to be slightly
softer in the coming weeks as the local supply of copra is beginning to show
signs of improvement, trade participants said.

  "We've received reports of improved copra supply in Mindanao," a trader said.

  Mindanao, a major island in southern Philippines, is where the bulk of the
country's copra supply comes from.

  However, an expected improvement in copra supply during the second half of
the year due to seasonal factors, isn't likely to substantially lower export
prices, traders said.

  "Bullish sentiment will continue to persist because supply is going to be
short despite improved copra arrivals," the trader said.

  But improved copra arrivals could boost the country's coconut oil exports in
the next two months, a second trader said.

  "We only exported around 59,000 (metric) tons in May, and we should see
better figures in July and August," the second trader said.

  He added that an expected entry of imported palm olein should further free up
some coconut oil for export.

  Tight copra supply in the country has been brought about by a series of
strong typhoons last year that felled many coconut palms in major producing
areas.

  Traders quoted coconut oil for June/July shipment at $985-$992.50/ton, CIF,
Rotterdam, July/August position at $975/ton. These prices are higher by
$20-$40/ton from prices offered a week ago.

  The Philippines is the world's largest exporter of coconut oil and other
coconut-based products.