Price Indicator

CPOTR Focus:

• Malaysian CPO Production Increases
• The ICDX CPOTR contract price 10/6 to 14/6 decreased by 4.68%.
  

Market Review

The CPOTR price movement decreased within a week to IDR 11,495/Kg due to the decline in prices of other vegetable oils. When the price of soybean oil is cheaper, the profits from using CPO are reduced because these two commodities can replace each other. Additionally, the release of increasing and decreasing Malaysian CPO production put pressure on prices.

On the supply side, MPOB data for May showed exports for the month at 1.38 million tonnes, up 12% m-o-m and 28% higher y-o-y, which helped ensure that stock level growth saw a slight increase to 1.75 million tonnes (up 1% m-o-m, 4% y-o-y). In May, CPO production reached 1.7 million tons, 13% higher m-o-m and 12% higher y-o-y, which was above market participants' expectations.

On the Malaysian side, news is circulating that the trade in palm oil and other agricultural commodities between Malaysia and China is based on a memorandum of understanding (MOU) which will be signed at the end of this year, said Datuk Chan Foong Hin. Chan mentioned he had received many requests regarding expanding palm oil exports to China, but Malaysia's production had stagnated at around 18 million tonnes of crude palm oil per year. Of the 18 million, three million are intended for domestic consumption, while the rest are exported to China and other world buyers.

On the other hand, Malaysia and Indonesia have filed separate complaints against the EU with the WTO in response to the EUDR, arguing that the ban is discriminatory. It should be noted that Indonesia and Malaysia contribute 85 percent of world palm oil production, with Indonesia as the leader in palm oil production and biodiesel production, directly affected by the EUDR.

Market View

India Buys Sun Oil in Large Quantities

According to circulating news, India reportedly purchased 500,000 metric tons of sunflower oil for delivery in June, a record high. This was due to lower prices resulting from competition between leading suppliers Russia and Ukraine, making it cheaper than soybean and palm oil. Higher purchases of sunflower oil helped reduce sunflower oil supplies in the Black Sea region.

WEEKLY ECONOMIC DATA & EVENTS CALENDAR

Source: ICDX Research