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Palm oil firms benefit from sky-high global energy prices
Indonesian sellers of crude palm oil (CPO) are enjoying windfall gains on the back of a rapid rise in energy prices across the globe.
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Surging price: Aerial view of an oil palm plantation in Bulutumbang, Belitung (JP/Donny Fernando)
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hort energy supply and the approaching winter in Europe are spurring demand for fuel, much to the benefit of Indonesian crude palm oil (CPO) exporters.
The head of the Finance Ministry’s Fiscal Policy Agency (BKF), Febrio Kacaribu, said the European energy crisis was expected to have a positive short-term impact on Indonesia, as it boosted export opportunities.
“With structural reforms, [we] hope part of the export profits will flow to investments and create jobs,” he said during a BKF media briefing on Friday.
European countries currently need “energy supply certainty” in view of a colder-than-expected winter, Febrio said, causing a commodity price hike in the last month or two.
However, private lender United Overseas Bank (UOB) economist Enrico Tanuwidjaja said the impact of the European energy crisis on commodities was uncertain.
“The impact of these external [factors] will be temporary. Nevertheless, supply and demand will continue to affect the CPO [price].”
The CPO futures contract traded on Bursa Malaysia Derivatives, a global benchmark, rallied on Sept. 30 to a record high of 4,579 ringgit (US$1,093) per ton, surpassing the earlier record price for a quarterly futures contract at 4,560 ringgit seen on Aug. 12, according to S&P Global Platts Analytics.
