Increase in Production Potential to Press Malaysian CPO Price
By : Abraham Sihombing And Aldo Bella Putra | Tuesday, October 24 2017 - 21:00 IWST
INDUSTRY.co.id - Jakarta - Despite opening up to 2,793 ringgit per ton price on Tuesday (24/10/2017), Malaysia crude palm oil (CPO) price is expected to decline again.
"The market players are worried about the increase in CPO production volume and the potential strengthening of the Malaysian ringgit rate against the US dollar," said Faisyal, a commodity stock analyst at PT Monex Investindo Futures, in Jakarta, Tuesday (24/10/2017).
On Monday, the Southern Palm Oil Millers Association (SPOMA) published data on Malaysia's CPO production volume for October 1-20, 2017 which showed a 20.6% increase over the same period in the previous month.
Meanwhile, Malaysian ringgit rates up to 10:50 pm today are observed at the level of 4.2325 per US dollar, or rose 0.08%. The strengthening of the ringgit rate makes CPO prices more expensive for other currency owners.
The price of CPO at the close of trading yesterday ended at 2,787 ringgit per ton, or 1.7% higher than on the previous trading day. The price increase is supported by rising prices of other vegetable oils and exports.
In the future, according to Faisyal, if the price of CPO can survive stable, then the price will likely reach 2,825 ringgit per ton. If the opportunity price can be exceeded, then the price of CPO Malaysia has the potential to reach 2855 per unit.
"Meanwhile, if the price of CPO drops and breaks 2,785 ringgit per ton, then the price of vegetable oil is likely to fall to the level of 2760 ringgit per ton," added Faisyal. (Abraham Sihombing)