Jakarta, CNBC Indonesia – Commodity prices of crude palm oil (Crude Palm Oil/CPO) rose again in today’s trading, Friday (21/1/2022), after successfully rising for 3 consecutive days.
Today, the price of CPO is priced at MYR 5,209/ton, which is up 0.42% from yesterday’s closing. According to Reuters analysis, the contract is testing levels resistance at MYR 5,174/ton. If the CPO price breaks down from MYR 5,174/ton, there is still a chance for a bearish move to the target price of MYR 5,024/ton.
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Source: Reuters- – |
Cargo surveyor company Societe Generale de Surveillance said that palm oil exports from Malaysia for the period 1-20 January 2022 decreased by 43.1 percent to 626,029 tons from 1,099,775 tons. Understandably, because Malaysia is experiencing rain which hampers palm oil production and also the projected decline in human resources ahead of the Lunar New Year holiday.
At the same time, Indonesia will implement a limited export policy starting January 24. Refers to the Reuters, India responded to the issue with a plan to switch from palm oil to soybean oil and sunflower seed oil. India also plans to supply more palm oil than Malaysia.
Naturally, Indonesia supplies 60% of CPO to India, while Malaysia only provides 40% of their CPO supply.
Indonesia’s export policy could be a sentiment driving palm oil prices to a record MYR 5,228/ton. But this can be controlled if India quickly responds to the policy by replacing CPO with other oils to reduce demand in the market.
Just so you know, the largest producer of soybean oil (I am oil) is the United States. Naturally, the delivery of CPO to India takes three to four weeks after the producers sign the contract agreement, but I am oil takes two months due to longer journey.
Govindbhai Patel, managing director of trading firm GG Patel & Nikhil Research Company, said that if India switched fully to supply from Malaysia, it would still not fill the CPO stock gap as Indonesia is their biggest supplier.
He also predicts that CPO shipments to India will fall by 500,000 tonnes in February, while supply I am oil and sunflower oil can jump to 600,000 tons.
CNBC INDONESIA RESEARCH TEAM
(aaf / aaf)
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