Product | Previous Week | % Change |
CPOTR | Rp 18,420 | 0.44% |
FCPO | MY 5,628 | 6.23% |
Soybean Oil | $65.27 | 4.12% |
COFU | $84.81 | 0.47% |
USD/MYR | MY 4.188 | 0.07% |
USD/IDR | Rp 14,347 | 0.26% |
CPOTR Focus:
The ICDX’s CPOTR moved higher 0.44% on the past week, amidst Indonesia domestically set rules for local markets. With the Domestic Market Obligation (DMO) applied to supply the local market and also Domestic Price Obligation (DPO) which applied so the CPO sold locally must not exceed Rp 9,300.00.
By applying the DMO, CPO exporter must show their proof of selling CPO domestically in order to gain approval for export permit. These actions were to overcome the high prices for both CPO and OLEIN-Veg Oil which previously surged to around Rp 20.000/liter, with high demand of CPO products spurred the rising prices.
Meanwhile, the demand from local seen to be solid as the B30’s program, and also statement from GAPKI that B40 program should be postponed that previously thought could be used to fight higher prices were rejected - showing that the government commitment to secure local's demand. With the used of B40, local demand for CPO products may be higher and thus creates a higher prices on CPO.
B40 to DMO to Move the CPO Prices
Government were ready to run a road test in order to publicly used the B40 bio diesel. The used of B40 biodiesel may create a higher demand from domestic side and further absorb the local’s CPO stock. Other than the B40 road test, the Domestic Market Obligation may cause the International CPO prices to shoot up as lower CPO stock to be able absorbed by other country. The DMO may cause lower supply to other consumer country such as China, India, and Pakistan, and pushing them to use other edible oil.
Date | Data/Events | Actual | Expectation | Previous |
All Week | CN - Holiday | - | - | - |
2-Feb | OPEC - JMMC Meeting | - | - | - |
Source: ICDX Research