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Analyst sees minimal impact on CPO price after Indonesia tightens exports
A recent government decision to tighten palm oil shipments by suspending some export permits will have a negligible impact on global prices, according to an analyst.
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Workers load palm oil fresh fruit bunches to be transported from the collector site to CPO factories in Pekanbaru, Riau province, on April 27, 2022. (Reuters/Willy Kurniawan)
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recent government decision to tighten palm oil shipments by suspending some export permits will have a negligible impact on global prices, according to an analyst.
Malaysia's benchmark crude palm oil price for April delivery on the Bursa Malaysia Derivatives Exchange rose 59 ringgit, or 1.5 percent, to 3,998 ringgit (US$930.42) a tonne, its third consecutive daily climb, three days after the Indonesian government announced the new rule, which briefly sparked concerns of tightening supply from the world’s largest palm oil producer.
But the increase in price did not last long, with prices falling 0.6 percent on Friday.
“It can be seen that all changes occurring in the domestic CPO market will have, to some extent, an impact on the global CPO market,” Girta Yoga, a senior research and development officer at the Indonesia Commodity and Derivatives Exchange (ICDX), told The Jakarta Post on Friday.
The CPO price had the potential to meet a resistance level in the range of 4,200 ringgit to 4,400 ringgit a tonne, Girta said. He predicted the range to move downside and reach a support level of 3,700 ringgit to 3,500 ringgit a tonne if faced with a negative catalyst.
Read also: B35 biodiesel program may temporarily boost CPO price
The government has tightened export rules for CPO and CPO derivative products by temporarily disallowing exporters to exercise some of the export rights they obtained for selling a portion of their products to the domestic market under a policy known as the domestic market obligation (DMO).
