Price Indicator

CPOTR Focus:

• Expectations of a decline in CPO exports.
• The ICDX CPOTR contract price 5/8 – 9/8 decreased by 2.38%.
  

Market Review

CPOTR price movements decreased within a week to IDR 12,915/Kg due to market expectations of a decline in export performance amidst a decline in palm oil supplies.

In the news circulating. Exports of Malaysian CPO products during August 1-10 plunged 17.7% from the previous month, according to independent inspection company AmSpec Agri Malaysia. Another cargo surveyor, Intertek Testing Services, said exports during the same period slumped 12.2%. In addition, market players estimate that palm oil supplies in August are expected to increase in line with the decline in exports from the previous month amidst possibly higher production.

Positive sentiment this week came from a boost in rival vegetable oils as oilseed workers in Argentina went on strike as wage negotiations with the company remained stalled, affecting shipments from one of the world's largest grain exporters. The strike particularly affected terminals located north of Rosario along the Parana River, through which more than 80% of Argentina's agricultural and agro-industrial exports are sent. At least thirty-six vessels remained delayed on Sunday near Rosario, one of the world's most important agro-export hubs. Argentina is a major grain producer and is one of the top exporters of soybean oil and soybean meal. At a time when the price of vegetable oil is increasingly expensive, making CPO a competing oil is also encouraged considering that these two oils are substitute products in the vegetable oil industry.

Market View

Indonesia begins testing to prepare for B50 palm oil biodiesel mandate

Indonesia is making preparations to trial blending palm oil-based biodiesel to 50% as the President's next promise to reduce oil imports, although no time limit has been set. This figure is an increase from the plan of President Joko Widodo's government which plans to mix at 40% next year and the current mix at 35%. Director General of Renewable Energy at the Ministry of Energy, Eniya Listiani Dewi, said that a static test of the B50 composition is being carried out by the Ministry of Energy and several stakeholders, the implementation of biodiesel will increase from B35 to B40 starting January 1 2025. In parallel with that, the government is also reviewing increasing the mixture to B50. In the next 2 months, studies on B50 will also begin to be carried out.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research