- (27/09 - 04/10) CPOTR prices fell 0.36% during the week
- The Indonesian Ministry of Trade prohibits the sale of bulk cooking oil
Over the past week, the price of the ICDX palm oil contract fell by 0.36% to the level of Rp 6,935 per kg from Rp 6,960 per kg in the previous week. This decline was caused by weakening palm oil prices traded on the Bursa Malaysia.
The latest data released by Amspec Agri Malaysia reported that Malaysian CPO exports volume in the September 2019 period fell by 21% to 1.3 million tons from 1.65 million tons compared to the August 2019 period. This decline in CPO exports caused CPO stockpiles to increase resulting in weakening prices.
Meanwhile, the Indonesian Ministry of Trade, through Minister of Finance Regulation No. 13 / PMK.010 / 2017 in the amount of US $ 0 / MT in Column 1, Appendix II, Letter C. has just set a reference price of crude palm oil (CPO) products for the stipulation of Export Duty (BK) for the October 2019 period to strengthen 3 48% to US $ 574.86 / Metric Ton (MT) compared to the September 2019 period of US $ 555.55 / MT.
Price Performance Indicators
BPDP-KS Strategy to Stabilize Palm Oil Product Price
The Government through the Oil Palm Plantation Fund Management Agency (BPDP-KS) explained the implementation of strategic steps including the short, medium and long term programs to sustain the Indonesian palm oil industry. The short-term program contains the consolidation of land area data and palm oil production to monitor CPO supply more accurately. The acceleration of absorption of domestic palm oil through B20 in full and acceleration of B30 to the expansion of several new export market destinations.
The mid-term program includes improving the welfare of farmers, this program is expected to provide support for smallholder oil palm farmers through increasing the accuracy of production targets. Second, support for improving smallholder farmers' supply chains or increasing competitiveness and integrated information service centers that are accessible to smallholder farmers.
Meanwhile, the long-term program includes investment in developing downstream industries through research support for the conversion of oil palm to bio-hydrocarbon fuel and investment in other downstream programs such as oleochemicals. These three programs are expected to stabilize the price of Indonesian CPO.
Banning the Bulk Cooking Oil
Ministry of Trade, through Enggartiasto statement, saying that by January 2020 bulk cooking oil sold by retailers will be banned. As a replacement, Ministry of Trade will push the sale of packed cooking oil with higher quality and with more affordable price. The move is expected by the government to improve local demands of Indonesian made product and to fight negative campaign of crude palm oil which accentuated the negative issue of crude palm oil. Will this decision improve local demand of crude palm oil and reduced the negative effect of black campaign from other competitor countries?
WEEKLY ECONOMIC DATA & EVENTS CALENDAR
||BR – Inflation Rate MoM
||BR – Retail Sales MoM
||MY – Unemployment Rate
||MY – Retail Sales YoY
Source: ICDX Research