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Weak Export Data Hold CPO Price to Rise  - icdx.co.id
  • (19/02 - 26/02) CPOTR price recorded a 0.91% appreciation
  • It is expected that extreme weather will disrupt production

Market Review

Closing the last week of February 2021 with a consolidation phase, the contract price of ICDX’ CPOTR still posted an increase of 0.91% on a weekly basis, after briefly targeting the level of Rp 14,000.- per tonne. Once again, the strong catalyst behind the solid foundation of CPO, can be traced to the increase in the price of crude oil which led to the increase in the price of other vegetable oils.

Vaccinations are still being carried out intensively in various countries as well as a number of data releases on the activities of various global sectors, which are considered to be increasingly showing good progress towards the current economic recovery. Following this, the world crude oil price as one of the main commodities driving global activity again rallied strongly to more than 5% on a weekly basis in the same week (fourth week of February 2021).

The increase in the price of crude oil substantially will make the use of biodiesel more competitive in line with the shift in the trend of a more environmentally friendly energy mix policy. CPO, which is the raw material for making biodiesel, can be used as a substitute for crude oil so that when the price of crude oil rises, the price of CPO also rises.

From within Indonesia itself, joining with current extreme weather, positive sentiment on CPO prices can be traced from projections of strengthening export demand and growth in domestic consumption. The Indonesian Palm Oil Association (GAPKI) projects that Indonesia's CPO production throughout 2021 will increase by 3.5% YoY to 49 million tons from last year's realization of only 47.4 million tons. Meanwhile, domestic consumption is in the form of oleopanganese and oleochemical products, each projected to grow 2% to 8.4 million tons and 14% YoY to 1.8 million tons this year.

Weak Export Data Hold CPO Price to Rise  - icdx.co.id

Price Performance Indicators

Previous Week % Change
CPOTR Rp 13,785
FCPO RM 3,914 +1.84%
SOYBEAN OIL USD 47.55 +7.97%
CRUDE OIL USD 59.24 +3.81%
USD/IDR Rp 14,061 +1.54%
USD/MYR RM 4.0380 +0.35%

Market View

Interfering the Supply Side of CPO, Weather Condition Looks Gloomy

Market participants were now worried regarding the weather conditions across CPO producer’s country, as rainy season usually cause the production and harvest be disturbed. Within this condition, the quantity of fresh fruit to be processed may possibly disturbed. The longer the bad condition stays, the more it affected the CPO prices whether in the near term or in the medium term, although the weather issue is a seasonal factor to move the CPO prices.


Date Data/Events Actual Expectation Previous
3/Mar CN – Caixin Services PMI Feb - 51.7 52.0
4/Mar MY – Interest Rate Decision - 1.5% 1.75%
4/Mar ALL – OPEC-JMMC Meetings - - -
7/Mar CN – Imports YoY Jan - Feb - - 18.1%

Source: ICDX Research