Malaysian CPO Price is Still Depressed India's Import Tax Policy
By : Abraham Sihombing And Aldo Bella Putra | Tuesday, August 15 2017 - 19:03 IWST
INDUSTRY.co.id - Jakarta - Malaysian crude palm oil (CPO) prices fell in early trading on Tuesday (15/08/2017) morning following a decline in prices in the previous trading session.
"The price decline is due to the negative sentiment that comes along with India's plan to raise the import tax of CPO and other vegetable oil," said Agus Chandra, an analyst of PT Monex Investindo's commodity products in Jakarta, Tuesday (15/08/2017).
According to the plan, the Indian government, the world's largest vegetable oil consumer, raised its CPO import tax to 15% on Friday last week. However, the move was followed by a 25% increase in CPO import tax returns. It aims to protect local CPO farmers against the arrival of cheaper imported goods from Malaysia and Indonesia.
"Despite this, the decline in crude oil prices helped boost negative sentiment towards CPO prices. Crude oil prices tumbled along with the strengthening of the US dollar exchange rate and the decline in Chinese domestic demand," Agus said.
Furthermore, Agus said that the decrease of CPO is also caused by other negative sentiment arising from the release of data conducted Interrtek Testing Service reporting Malaysian CPO export decline of 14.6% during 1-15 August 2017.
"During this period, the volume of Malaysian CPO exports fell to 512,039 tons compared to the same period in the previous month of 599,414 tons," Agus added.
Agus explained that CPO price technically will drop to the nearest support point at the level of 2620 ringgit per ton before finally drooping at 2,570 ringgit per ton. "However, if the price creeps up and is able to break the 2,700 ringgit per tonne level, then the CPO price will continue to move to 2,740 ringgit per ton," Agus said. (Abraham Sihombing)