Just Info… The Highest Record Palm Oil Price of All Time!

Jakarta, CNBC Indonesia – Crude palm oil price (Crude Palm Oil/CPO) scored a record high today, Thursday (27/1/2022) after falling yesterday.

According to Refinitiv data, CPO futures on the Bursa Malaysia Derivatives rose 1.82% or rose 97 points to MYR 5,426/ton. In fact, today’s CPO price set a new record and became the highest point since 1980.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose 1.50% to MYR 5,409/ton (US$1,287.55) in early trading. The contract posted a 1.78% gain overnight as crude prices soared on tight supplies and growing geopolitical concerns over Russia and Ukraine.

According to analyst Reuters, the price of CPO can test the point resistance at MYR 5.484/ton, when today’s CPO price can break above the point resistance, meaning that the price of CPO could continue to soar to the range of MYR 5,558 – 5,608/ton.

Source: Reuters

However, when the CPO price breaks below the point support at MYR 5,366/ton, then there is a chance to decline to the range of MYR 5,247-5,292/ton. Looking ahead, the price of CPO today could continue to soar due to the rising prices of soybean oil and corn oil. Prediction of CPO price will soar to MYR 5,484/ton today.

Palm oil on the European vegetable oil market also rose yesterday following gains in Malaysian palm oil futures and concerns about tight supplies due to tensions between Russia and Ukraine. Demand for palm oil prices was $10 and $47.50/ton higher after Malaysian palm oil futures closed, rising between MYR 37 and 55/ton.

Meanwhile, demand for palm oil in India has still not returned to its pre-Covid-19 level, with imports in the November 2021 period lower by 13% (year-on-year/yoy). RHB Investment Bank Bhd from Malaysia said that the Indian government had taken steps to curb inflation, such as reducing import duties, imposing limits on oil stockpiles.

The Malaysian Palm Oil Board (MPOC) estimates that India’s palm oil imports will fall 5% this year to 8.2 million tonnes. The main reason is the high price of CPO.

Just so you know, the oil palm tree is native to West Africa where it grows in the wild to a height of over 60 feet (18.3 meters). Oil palm was introduced to Malaysia by the British and to Indonesia by the Dutch in the mid-1800s and was first grown as an ornamental tree.

Palm oil is used in a wide variety of food and household products, from biscuits, ice cream, chocolate, to soaps and cosmetics, as well as biofuels. Malaysia and Indonesia account for about 90% of global palm oil production, while India, China, Indonesia and Europe are the main consumers. Meanwhile, Malaysia produced around 5 million tonnes of palm oil in 2020, meaning 6% of the global total and the rest from Indonesia.

CNBC INDONESIA RESEARCH TEAM

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