The price of Palm Oil decreased due to Malaysian CPO export data for April 1st – April 30th 2018 decreased to 1,331,564 metric ton compared to March 1st – March 31st 2018 at 1,394,973 metric ton and Malaysian CPO production data for April 2018 predicted to increase to approximately around 1,600,000 metric ton compared to April 2017 at 1.548.026 metric ton.
Another factor that caused CPO prices to fall is the re-introduction of Malaysian CPO export tax of 5.00%, which start in May 2018 after being suspended for the last four months.
The British supermarket, Iceland, decided to stop using Crude Palm Oil as the raw material for all the food produced by the company. This happened after Iceland’s Managing Director, Richard Walker, visited Indonesia and saw firsthand the destruction of the environment, especially the rainforest, due to the development of the Palm Oil industry. In addition, until now, there is no concrete evidence that the CPO that has been used is truly sustainable.
Ramadan to Push Crude Palm Oil Consumption
Heading to Ramadan, which start a day-long fasts in mid-May, open a possibilities to increase the crude palm oil consumption as Muslims majority regions, typically break their fasts with communal feasting. This higher CPO consumption will have a chance to offset a weak export demand that put CPO price under pressure.
Malaysia to Release CPO Production Data
As scheduled, the Malaysia Palm Oil Board will release data regarding the Malaysia CPO production and export. The market is expected the production will rise meanwhile for export will show a declining number. If the data were released as expected, pressure on CPO price will be hard to end.