Price Performance Indicators

CPOTR Focus:

• ICDX CPOTR contract price 11/27 – 12/01 increased by 0.84%.
• Increased Indian demand and disruption of daytime vegetable oil supplies.
  

Market Review

CPOTR price movements increased within a week to IDR 11,720/Kg, triggered by soaring demand from India as well as concerns about Argentina's grain trade due to a lack of soybeans due to drought and farmers holding back production.

In news circulating, according to five dealers in November, India's palm oil imports jumped 22% compared to the previous month due to large discounts compared to soybean oil and sunflower oil. Higher purchases helped reduce palm oil stocks in Indonesia and Malaysia so that this pushed CPO prices up further.

From Malaysia, on 27/11 Deputy Prime Minister Datuk Seri Fadillah Yusof said that exports of crude palm oil (CPO) to India continued to show positive developments in line with the increase in the country's demand for CPO to six million tonnes. However, currently Malaysia is only able to export around four million tons to its country, making India Malaysia's largest CPO importer. "We cannot give away and sell all our CPO to just one country, so we have to evaluate it too. India asked us to increase exports to six million tonnes, so we detailed the steps.”

The increase in CPO prices came as a rise in soybean oil prices as Argentina's grain trade largely "paralyzed" due to a shortage of soybeans due to drought and farmers holding back production, anticipating a devaluation of the peso under the government of President-elect Javier Milei. It is worth remembering that Argentina is usually the world's largest exporter of processed soybeans and is among the top three exporters of corn. Argentina is battling triple-digit inflation and currency debasement, having strict capital controls that have seen the parallel exchange rate reach 1,000 pesos per dollar, far from the official rate of just over 350 pesos. This hurts exporters who often have to repatriate most of their sales from abroad to the country at official rates, thereby getting fewer pesos for every dollar. So market players are waiting for the new policy plan that will be taken by Argentina's new President Javier Milei to devalue his country's currency on a large scale.

Market View

Imposition of Import Duty on Biodiesel Imports

Indonesia has requested consultations on the WTO dispute with the EU regarding the imposition of import duties on biodiesel imports from this Southeast Asian country at the WTO. Previously, the dispute settlement body of the World Trade Organization (WTO) had agreed to form a panel to review import duties imposed by the European Union (EU) on biodiesel imports from Indonesia. Senior Official Ministry Trade Budi Santoso said "Efforts to appeal this case to the WTO are very strategic to maintain market access for Indonesian biodiesel products in the EU market which is currently subject to countervailing import duties of 8% to 18%."

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research