The price of Indonesian palm oil in the past week fell 0.14% to Rp. 7,340, - from Rp. 7,350. This was caused by the sentiment from thin CPO trading volume in the short trading week due to the Chinese New Year's long holiday.
The CPO trading volume fell due to the long holiday. The CPO trade in Indonesia was closed for one day (Lunar New Year), while the CPO trade in Malaysia was closed for three days (Lunar new Year and Federal Territory Day). Furthermore, the Malaysian ringgit in the past week strengthened. As a result, the CPO trading volume within a week declined. Intertek Testing Services (ITS) reported that Malaysian CPO exports in the period of February 1 – 10, 2019 fell 13% to 393,353 tons from 451,845 tons in the period of January 1 – 10, 2019.
Meanwhile, India has now officially announced to implement a sustainable palm oil standard. In this case, besides promoting sustainable palm oil production, SPOC - India will also develop strategies, plans and activities that are directly involved with palm oil producers. This positive sentiment is expected to support the prospect of palm oil in 2019.
CPO Prices Stable while FFB Fell
Last week, the CPO prices stable, while in physical market, the FFB prices in Riau fell up to Rp 2/kg. The prices fell caused by CPO producers were not selling for the whole past week and also the kernel prices also fell. Will the fell of FFB prices last week effect the prices movement of CPO this week?
Malaysia and Thailand Follows Indonesia B20
Following the successful of Indonesia using B20 for its biodiesel fuels since 2018 fourth quarter and the realisation of the program already reach 92% in February 2019 – causing lower diesel import as much as $937.48, the Malaysia and Thailand ministry also eager to follow the program. As per APROBI chairman statement, that the Malaysia government has already asking APROBI for further support to implement the B20 in 2020. While both country currently using B10 and B5. Will this issue support the risk sentiment of the CPO price and further support the CPO prices as it may cause to maximise the use of CPO in domestic term?