Missed CPO Price Moment

Missed CPO Price Moment

InfoSAWIT, JAKARTA – Palm oil industries are nationally facing to the fast progress of price fluctuation. If in the early of this year, crude palm oil (CPO) got very expensive in the globe, the stakeholders, and smallholders were happy for they got much profits from it.

It happened for the sunflower trade issue in Ukraine because it is in war with Russia. Vegetable oil supply in the world is interrupted. This leads palm oil as the option and got more expensive and it was much more than soybean oil price.

CPO hit the most expensive price in the world history at RM 6.632 (US$ 1.506,25) per ton. But the expensive CPO in the globe increased palm cooking oil price in Indonesia and the Government of Indonesia should publish ‘out of the box’ policy, which was, temporarily stopped CPO and its derivative product exports in the trade.

By the late of April 2022 President Joko Widodo officially banned CPO and its derivative exports by hoping, CPO supply in this country would be more and palm cooking oil price could be back to normal.

In fact, palm cooking oil was not back to normal but smallholders’ fresh fruit bunch (FFB) got much cheaper because the mills did not purchase theirs FFB by saying that companies’ CPO storage tanks were full because the exports were not normal still.

What to say, CPO price gets cheaper, smallholders’ FFB is not back to normal. The expensive CPO is over. By the late of June 2022, CPO got much cheaper up to RM 4.922 (US$ 1.117,42) per ton or decreased 22% compared to the most expensive CPO.

As quoted from Reuters, CPO reference contract at FCPOc3 for October 2022 delivery at Bursa Malaysia Derivatives Exchange was RM 3.777 (US$ 849,15) per ton in the early session.

The cheaper CPO impacts to smallholders FFB price in Indonesia. The government deleted export levy in the midst of June 2022 which Palm Oil Plantation Fund Management Agency (PFMA) manages. The reason is about to make smallholders’ FFB more expensive based on the Regulation of Minister of Finance (RMF) Number 115/PMK.05/2022.

Not only that, the signal of cheap smallholders’ FFB in many palm oil plantation centers was noticed by Coordinator Minister in Maritime and Investment, Luhut Binsar Pandjaitan.

He accelerated CPO exports by encouraging Minister of Trade, Zulkifli Hasan to do the same by escalating multiplier number ration of CPO and palm cooking oil exports.

For detail, dear readers could read in Focus InfoSAWIT July Edition. Besides in Binoculars, we would discuss about what the government does in palm oil seed DNA test which would be distributed to the smallholders that implement smallholders replanting program (SRP). (T2)