Today's CPO Price Expected to Continue Increase

INDUSTRY.co.id - Jakarta - The price of crude palm oil (CPO) Malaysia is expected to continue its rise in trading session Wednesday (24/01/2018) this. The price of Malaysian CPO has the potential to move at a price range of RM2,440-2,535 per ton.

"Although the strengthening of the Malaysian Ringgit (RM) may limit price increases, the outlook for production decline and other vegetable oil price increases is predicted to be a positive sentiment for CPO price hikes today," said Faisyal, Research Staff & Market Analyst at PT Monex Investindo Futures, in Jakarta, Wednesday (24/01/2018).

Malaysian CPO prices on Tuesday traded closed up in two consecutive trading sessions of 0.8% to RM2.494 per ton position on the Malaysi Derivatives Exchange.

A CPO trader in Kuala Lumpur said that Mayaksia's CPO production from January 1-20, 2018, has been cut by 17% compared to the same month in the previous month.

Faisyal said that CPO production volume is expected to continue to experience seasonal decline in the first quarter of each year before returning again to peak production increase in the third quarter of each year.

"For March 2018 delivery contracts, the price of soybean oil on the Chicago Board of Trade (CBOT) rose 0.6%. The commodity for May 2017 delivery contract on Dalian Commodity Exchange closed up 0.7%," Faisyal said.

Meanwhile, Faisyal said, the negative sentiment for CPO price today could potentially come from the strengthening of Ringgit at 10:54 pm. Malaysia's currency strengthened 0.24 percent to 3.9175 per US dollar. Strengthening Ringgit will make CPO prices become more expensive for other currency owners.

Nevertheless, according to Faisyal, the upward trend in CPO price will be determined if the price of palm oil is able to penetrate RM2.500 per ton before it finally continues to go up to RM2.535 per ton.

"Similarly, the price of CPO will potentially decrease if it has reached RM2.455 per ton. If the price level has been broken, then the price of CPO will continue to decline up to RM2.440 per ton," Faisyal concluded. (Abraham Sihombing)