It has been almost a week since President Joko Widodo (Jokowi) officially banned exports CPO since last Thursday (28/4). However, international CPO prices have not jumped ‘exorbitantly’ as expected. In fact, Indonesia is the number one CPO producer in the world.
Quoting Trading Economics, on Friday trading (29/4), CPO prices rose 2.75 percent from 6,920 ringgit to 7,105 ringgit.
According to Commodity Observer and Director of PT TRFX Garuda Futures Ibrahim Ascustombi, international CPO prices are still ‘cool’ because the international CPO market, which refers to the Malaysian stock exchange, is closed. Trading closure due to Eid holiday from Monday (2/5) to the following Monday (9/5).
“It just so happened that on April 28 the export ban was effective but only on April 29 the market was open, after that it was closed. Maybe, if the market opened, the price would jump,” he told CNNIndonesia.comWednesday (4/5).
Therefore, he assesses that the effectiveness of the export ban policy in boosting the international market has yet to be seen. Seeing this ‘coincidence’, Ibrahim is not surprised that international CPO prices have not jumped.
“What does that mean? Helpful for the Eid al-Fitr holiday so that the market is a little more stagnant,” he added.
When the market reopens, Ibrahim projects that the CPO price will gap up at the opening of trading on Monday in the range of 100 points or to 7,205 ringgit from the closing position of 7,105 ringgit.
However, he predicts the increase will not last long and there will be a decline. Ibrahim projects that the CPO price will close at 7,155 ringgit, up 50 ringgit from the closing price.
“Most likely there will be a gap up, but it will fall again. For example, if we look at Bursa Malaysia when the price of CPO contract in July 7,105 ringgit, it could jump to 7,205 ringgit, but will return to 7,155 ringgit,” he said.
Previously, Jokowi banned the export of raw materials for cooking oil and cooking oil starting Thursday (28/4). The government had revised that the ban only applies to RBD palm olein, aka CPO, which has been half processed and can be used as cooking oil.
But a day later, the government decided that the export ban would apply from CPO to other downstream products, such as cooking oil.
(wel/one)
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