U.S.-China Trade War Weigh on CPO Price - icdx.co.id
  • In a week (10/09 – 14/09) the price of ICDX’s CPO down 0.51%.
  • ICDX’s CPO highest volatility is 0.54%.

Market Review

The price of Palm Oil dropped due to Malaysian Palm Oil Board (MPOB) data regarding Malaysian production data for August 2018 increased by 7,92% to 1,622,231 metric ton compared to July 2018 at 1,503,220 metric ton and Malaysian CPO reserves data for the month of August 2018 increased by 12,40% to 2.49 million ton compared to the month of July 2018.

In addition, the decrease in CPO prices is also caused by the trade war intensity between the United States and China. The ongoing trade war between the two countries has led to market concerns, especially over the possibility of the increase of US import tariffs policy on China. Anxiety will arise in new US obligations on China’s imports. This indicates a large escalation of the trade war for the two countries. US President Donald Trump said that he would raise tariffs on imported goods from China worth USD 267 Billion. Previously, the US government announced that they would impose USD 200 Billion tariff on imported goods from China. President Trump’s uncompromising attitude towards China caused little opportunity for settlement between the two countries. Additional tariffs by the US will trigger a revenge from China.

Chart CPO Tertekan 180917 - icdx.co.id

Price Performance Indicators

Previous Week % Change
CPOTR IDR 8,055 -0.51%
FCPO MYR 2,247 -0.84%
SOYBEAN OIL USD 27.78 -0.57%
CRUDE OIL USD 68.99 +1.83%
USD/IDR IDR 14,835 -0.38%
MYR/USD MYR 4.1415 -0.05%

Market View

U.S-China Trade War May Kept CPO Market Dim

As the U.S. still continues the tariff war with China, with the latest issue that U.S. will slap duties on virtually all Chinese imports. For the record, U.S. has already imposed 25% tariff on $50 billion worth of Chinese goods. The issue had already affected the price of soybean oil prices – one of the biggest trade products between U.S. and China. The soybean prices, which is highly correlated with other vegetable oils, may impact the CPO price in the near future if the U.S-China issue is heightened.


Date Data/Events Actual Expectation Previous
15/Sep Malaysia – Palm Oil Export Data (1 – 15 Sep) 742,997 MT N/A 415,719 MT
19/Sep USA – API Crude Oil Stock Change -0.92 M -8.636 M
19/Sep Argentina – GDP Growth Rate YoY (Q2) 1.40% 3.60%
20/Sep Argentina – Leading Indicator MoM (Aug) 0.10% 0.30%
20/Sep Argentina – Retail Sales YoY (Jul) 28.00% 31.20%
20/Sep Malaysia – Palm Oil Export Data (1 - 20 Sept) N/A 609,098 MT
21/Sep Argentina – Unemployment Rate (Q2) 9.40% 9.10%

Source: ICDX Research