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Indonesia's CPO prices expected to adjust after stellar 2021
While analysts warn of lower crude palm oil (CPO) prices next year, producers remain hopeful at least for the first half of 2022.
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Bountiful harvest: This undated photo shows an aerial view of an oil palm plantation in Bulutumbang, Belitung. (JP/Donny Fernando)
T
he Indonesian Palm Oil Association (GAPKI) expects the crude palm oil (CPO) price to remain high in the first half of the coming year amid sustained demand, but experts warn of a correction.
GAPKI deputy chairman Togar Sitanggang said on Dec. 2 that CPO prices were projected to range from US$1,000 to $1,250 per ton at least for the first half of 2022.
“CPO prices are expected to remain around $1,000 for the entire first half of 2022 and possibly until the end of next year,” Togar said, speaking at an event titled the Indonesian Palm Oil Conference (IPOC) 2021 and 2022 Price Outlook.
According to the global benchmark Bursa Malaysia Derivatives, the CPO price was 5,175 ringgit ($1226.3) per ton on Dec. 2, a massive increase from this year’s low of 3,470 ringgit per ton on Jan 20.
Read also: CPO output decline to continue in 2022: Gapki
Separately, state-owned Bank Mandiri estimated the Malaysian CPO price would correct from an average $1,050 per ton in 2021 to $879 per ton in 2022.
Bank Mandiri industry and regions analyst Andrian Bagus Santoso expected several factors, including a less accommodative monetary policy of the United States Federal Reserve and CPO output exceeding consumption growth, to cause a correction in CPO prices next year.
