CPO PRICE MARCH 17: Strengthen Along with Oil, El Nino to Suppress Production Through Third Quarter 2016

The CPO futures contract for June 2016, the most active contract traded on Bursa Malaysia, opened 0.23% lower at 2,605 ringgit per ton.
However, the commodity immediately started to rise and gained 0.88% to 2,634 ringgit or Rp 8.45 million per ton as of 10:58 WIB. CPO contracts have strengthened for 3 consecutive days.
The price of CPO increased significantly with the sharp upturn in crude oil prices. Brent oil prices strengthened 0.87% to US$ 40.68 per barrel as of 11:03 WIB after closing up 4.1% yesterday.
BMI Research has increased its average CPO price projection for 2016 from 2,350 ringgit to 2,500 ringgit per ton, taking into consideration the El Nino phenomenon which has caused a greater impact than previously expected.
“Southeast Asia has experienced lower than average rainfall since January and is expected to continue until the end of March. This will reduce palm oil production to the third quarter of 2016,” said BMI Research.
Movement in the June 2016 CPO Contract Price




Date


Level


Change



17/3/2016(10.58 WIB)
2.634
+0.88%



16/3/2016


2.611


+0.04%




15/3/2016


2.610


+0.81%




14/3/2016


2.589


-0.50%




11/3/2016


2.602


+2.48%




Source: Bloomberghttp://market.bisnis.com/read/20160317/94/528952/harga-cpo-17-maret-menguat-bersama-minyak-el-nino-tekan-produksi-hingga-kuartal-iii2016