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Jakarta Post

Crude palm oil price increases: Fact or fiction?

  • Achmad Syafriel


  /   Wed, June 17 2009   /  01:21 pm

Predicting commodity prices including for CPO is never an easy task. While data may show a certain trend in price propensity, actual materialization on pricing may be entirely different. To forecast CPO prices is not only a simple supply demand equation but it also includes other various variables, which are equally unpredictable such as the weather, prices of substitute products (e.g. soybean and rapeseed) and global economic conditions. In an effort to estimate CPO prices this year, we attended the 2009 Indonesian Palm Oil and Price Outlook Conference in Bali. Many speakers believed that the CPO price would decline to an average of US$550-$600/MT compared to a recent peak of $760/ MT. It is worth noting that one year earlier at the same conference, CPO experts there believed prices would stay above the $1,000/MT mark. But what actually unfolded was ...