Uncertainty Of The Indonesian Situation Also Weighed On The Movement Of CPO Prices
Price Performance Indicators
Product | Price | % change |
CPOTR | 22550 | -1.70% |
FCPO | 6355 | 1.07% |
Soybean Oil | 80.51 | 2.03% |
COFU | 101.65 | -4.57% |
USD/MYR | 4.323 | 2.20% |
USD/IDR | 14361 | 0.08% |
Market Review
Focus CPOTR:
- Within a week (21/3 – 25/3) ICDX CPO prices down 1.7%.
- The arrest of the cooking oil mafia created market uncertainty
The price of CPOTR fell 1.7% to level of IDR 22,550/Kg at the close of trading last week. The market looks alert amid the uncertainty of the Indonesian CPO market regarding the rise of news about the cooking oil mafia. In addition, market players are waiting for the next policy to be taken by the Indonesian government in overcoming the spike in domestic cooking oil prices.
Malaysia is also experiencing uncertainty regarding the issue of increasing labor wages, especially for palm oil plantations in Malaysia which will be implemented in May. Quoting from the Sarawak Oil Palm Plantation Owners Association (SOPPOA), only 2 companies agreed to the wage increase.
The demand side has come under pressure from soaring COVID-19 cases in China, which has led to a lockdown in Shanghai since March 28 and plans for mass testing in several major Chinese cities including Beijing. China is the world's second largest importer of CPO after India, so that the re-imposition of restrictions in China will also have an impact on the demand for CPO from China.
Meanwhile, geopolitical tensions in Eastern Europe that are still unresolved have an impact on the supply of vegetable oil, especially sunflower oil and corn oil, which causes price increases for vegetable oil as a substitute product for palm oil.
Market View
Indonesian CPO export moratorium and its derivatives
After the arrest of the cooking oil mafia, Indonesian President Jokowi announced (22/4) a plan to ban Indonesia's CPO exports starting April 28. The announcement triggered a spike in CPO prices up by 3% on April 25 trading. However, the Minister of Industry on April 27 stated that the export ban was only applied to Refined Bleached Deodorized (RBD) Palm Olein products, before finally being clarified again through President Jokowi's official statement on April 28 that the sale of CPO and its derivative products for export purposes is effectively prohibited from Thursday 28 April 2022 until the price of cooking oil in the domestic market returns to stable (IDR14,000/liter). Players in the global market focus on monitoring further developments on the situation in the Indonesian CPO market, this is because Indonesia is the world's first largest CPO producer, so the impact of the export ban will affect the supply of CPO in the global market.
WEEKLY ECONOMIC DATA & EVENTS CALENDAR
Jam | Data | Ekspektasi | Sebelumnya |
11:00 | Inflation Rate YoY MAR | - | 0.0 |
11:00 | Leading Index MoM FEB | -0.4% | 1.1% |
11:00 | PPI YoY MAR | - | 9.7% |
Source: ICDX Research
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.