CPO price is driven by soybean price

Citing Bloomberg, Friday (2/6) at 11.29 AM WIB, the August-2017 CPO contract at the Malaysian Derivative Exchange rose 0.75% to RM 2,532 per metric ton compared with the day before. However, over the past week the CPO has decreased by 0.9%.

Putu Agus Pransuamitra, Research and Analyst at PT Monex Investindo Futures, explained that higher CPO exports from Malaysia and firmer soybean prices became positive sentiment for the CPO at the end of the week. Intertek Testing Service reported that Malaysian palm oil exports in May climbed 16% to 1.3 million tons compared with the previous month. “This increase became an early indication of potential higher demand during the Ramadan month,” he said.

Meanwhile, soybean prices at the Chicago Board of Trade climbed around 0.48%. “The higher prices for this competitor vegetable oil product tended to raise CPO prices,” added Putu.

However, the stronger Malaysian ringgit dampened the CPO price increase. Putu estimated that the potential trading range for CPO at the Malaysian bourse today will span from RM 2,490 to RM 2,560 per metric ton. Meanwhile at the Indonesian Commodity and Derivative Exchange the potential trading range is Rp 8,740 to Rp 9,230 per kilogram.

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