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CPO Increased Almost 4% for the Lack of Workers in Malaysia

CPO Increased Almost 4% for the Lack of Workers in Malaysia

InfoSAWIT, KUALA LUMPUR – Crude palm oil (CPO) price at Bursa Malaysia Derivative Exchange increased almost 4% on Thursday (14/7/2022) morning. It got better before drastically decreasing deeply for the Government of Indonesia decided not to deliver plantation workers to Malaysia.

CPO reference contract at FCPOc3 for September 2022 delivery at Bursa Malaysia Derivatives Exchange increased RM 133 per ton or about 3,54% to be RM 3.894 (US$ 877.03) per ton.

Prior, CPO tender was closed cheaper about 8,6% to be the lowest price for the past one year. It might happen for the decreasing CPO prediction from Malaysia.

The Government of Indonesia decided not to deliver the migrant workers to Malaysia. According to the Ambassador of Indonesia in Malaysia, Hermono, the decision is available for many sectors, as quoted from Antara.

The root of the issue is that the ignorance of one point in memorandum of understanding between Indonesia and Malaysia about the relocation and protection for the Indonesian migrant workers in domestic sector. It was revealed that Malaysia still lets the worker’s recruit using System Maid Online (SMO) which has no clear protection to do.

As quoted from Reuters, palm oil plantations in Malaysia are still hit the worst from the lack of workers because the plantations in Malaysia still depend on the workers from Indonesia to harvest namely for the peak season next months.

Chief of Plantation Researcher of CGS-CIMB Research, Ivy Ng said in the latest report, the postponement (of workers’ delivery) would decrease palm oil production in the second semester of 2022 to the lower level than it in last year.

Soyoil contract at Dalian, DBYcv1 increased 1,4%, CPO contract at DCPcv1 did too 1%. Soyoil price at Chicago Board of Trade BOcv1 increased 1,3%.

Reuters’ technical analyst, Wang Tao noted, CPO could be at RM 3.592 per ton and would be decreasing to be RM 3.284 per ton. (T2)