CPO Price Moved Slightly Up - icdx.co.id
  • In a week (20/08 – 24/08) the price of ICDX’s CPO up 0.26%.
  • ICDX’s CPO highest volatility is 0.09%.

Market Review

The Palm Oil price rose on lower Malaysian CPO production data for July 2018 which decreased to 1,503,220 metric ton compared to July 2017 at 1,826,828 metric ton.

In addition, CPO prices rose due to the high expectation of the meeting between China and the United States in Washington, which was held to discuss the issues of trade and find a way out of tensions caused by the trade war. The meeting was aimed to find a loophole for the cancellation of the imposition of additional import tariffs by the United States and China will impose similar things in return. Although this meeting couldn’t be expected to produce important agreements, the willingness of China and the United States to hold a meeting had a positive impact on market participants.

On the other hand, GAPKI predicted that the exports of Indonesian CPO and its derivatives in the period of July 2018 will increase by around 30.00% compared to the previous month at 2.73 million tons. The increase on the exports of Indonesian CPO was caused by the higher demand from India. This was influenced by the increase of soybean oil import tariffs, which is the substitute product for CPO, in June 2018 from 30.00% to 35.00%. The increase in tariffs caused the difference between soybean oil and palm oil to be narrower in distance and make the palm oil to be more competitive.

Chart CPO Flat 180827 - icdx.co.id

Price Performance Indicators

Previous Week % Change
CPOTR IDR 7,765 +0.26%
FCPO MYR 2,219 -0.85%
SOYBEAN OIL USD 28.15 -0.28%
CRUDE OIL USD 68.72 +4.26%
USD/IDR IDR 14,655 +0.25%
MYR/USD MYR 4.1095 +0.13%

Market View

U.S. – China Trade War Still Continue

No resolution between the 2 countries regarding the month-long export-import tariff war on commodities and consumer goods most likely to kept vegetables oil business on pressure. Note that, further tension – such as imposing higher tariff – may put the crude palm oil price in trouble, as it opens a chance to lower the international demand from major countries.

The IDR Hovered Near 2.5 Years Low

The IDR move at its weakest level in almost 2.5 years against USD. The weakness had given support in underpinning Indonesian crude palm oil price movement, as lower IDR makes the CPO prices cheaper for international trader. Will this issue give further support for CPO prices? Note that the USD has moved lower for against major currencies for the past week, and may give a chance for IDR to move stronger.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Date Data/Events Actual Expectation Previous
25/Aug Malaysia – Palm Oil Export Data (1 - 25 Aug) N/A 835,134 MT
29/Aug USA – API Crude Oil Stock Change 0.61 M -5.17 M
31/Aug Argentina – Industrial Production YoY (Jul) -0.60% -8.10%
31/Aug Malaysia – Palm Oil Export Data (1 - 31 Aug) N/A 1,030,909 MT

Source: ICDX Research




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