Increase in Export Volume Opportunity Increase CPO Price
By : Abraham Sihombing And Aldo Bella Putra | Wednesday, September 20 2017 - 21:00 IWST
INDUSTRY.co.id - Jakarta - The price of crude palm oil (CPO) opened at 2,783 Malaysian ringgit per ton on Wednesday (20/09/2017), or higher than Tuesday (19/09/2017).
"The increase is due to market participants considering an optimistic export data for September 2017," said Faisyal, an analyst with PT Monex Investindo Futures products commodities in Jakarta on Wednesday (20/09/2017).
According to the data, according to Faisyal, Malaysia's CPO exports during September 1-20, 2017 grew 25.4% compared to the same period in August 2017.
Meanwhile, Faisyal said, demand for CPO is expected to increase throughout September 2017 as major CPO consumers, namely China and India will now prepare their CPO reserves ahead of the Mid-Autumn and Diwali festivals, which will typically increase consumption of edible oil.
Another sentiment underpinning Malaysia's CPO price increase is the depreciation of the Malaysian ringgit rate against the US dollar (US). At 13:05 GMT, the ringgit weakened 0.04% to 4.1915 per US dollar. A weakened ringgit will make CPO prices cheaper for other currency owners.
Faisyal explained, technically, CPO price point of resistance is at the level of 2800 ringgit per ton. If the level is reached, then the price of CPO will continue to propagate up to 2,825 ringgit per ton.
"Meanwhile, the CPO price support point is at 2,765 ringgit per ton. If the price of CPO falls and breaks those levels, then the CPO price has the potential to touch the lowest point of 2,740 ringgit per ton," Faisyal said. (Abraham Sihombing)