The price of crude palm oil CPOTR on the ICDX has once again moved unusually. When the price of crude oil falls, usually the price of CPO will follow suit. But unlike last week, CPOTR has recorded a weekly increase of 5.47%, ignoring out 1.55% correction of WTI ICDX crude oil contract (COFU). Although sentiment continues to be triggered by the spike in COVID-19 cases in India which threatens the level of demand for energy sector commodities, global consumption of vegetable oils is statistically increasing.
One of the supporting factors for CPO is the good level of demand from a number of countries. During March 2021, India's total CPO imports reached 526,463 tons, an increase of 33.5% compared to the February 2021 period in accordance with the expectations of market players and analysts. Meanwhile, data from AmSpec Agri Malaysia reported that the number of exports of Malaysian CPO products for the period 1 - 20 April was observed to increase by 10.2% compared to the same period the previous month.
On the other hand, this sentiment was also added to the celebration of the months of Ramadan and the upcoming Eid Al-Fitr in producer countries, especially Indonesia and Malaysia. In addition, limited supply from producing countries can keep CPO prices at a high level. This is partly triggered by a shortage of workers in producing countries, as well as increased biodiesel production due to the commitment of the governments of several countries such as Indonesia, the United States, Brazil and Germany to continue implementing biodiesel use programs.
A month to Move the CPO Prices
Indonesia and Malaysia has begun fasting season that will ended in mid-May. Within this fasting season, several palm oil-processed products usually showed higher consumption and demand trend to crude palm oil, thus may lead to a higher CPO prices. Will the prices kept moving higher until fasting season ended in mid-May?