PALMOILMAGAZINE, MUMBAI – The contract price of crude palm oil (CPO) at the Malaysia Derivatives Exchange saw an increase on Monday, October 9, 2023, following a 4.4% decrease in the previous week.
This upswing was driven by the anticipation of rising demand for palm oil biodiesel due to the increasing cost of crude oil.
The contract price for CPO with the code FCPOc3, set for delivery in December 2023 at the Malaysia Derivatives Exchange, rose by RM 48 ringgit per ton, approximately 1.33%, reaching RM 3,648 (equivalent to US$ 772.88) per metric ton during the early trading session, as quoted from Reuters.
The surge in crude oil prices, exceeding US$ 4 per barrel in Asian early trading, was triggered by recent military clashes between Israel and Hamas at the end of the previous week, creating political uncertainty in the Middle East. This increase in crude oil prices made palm oil an appealing option as a biodiesel material.
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Soyoil contract price at Chicago Board of Trade BOc2 also increased 1,46% in the early session.
According to the survey by Reuters, CPO stocks in Malaysia by the late of September 2023 might increase to the highest level since October 2022 though exports also increased when production increased. CPO was at RM 3.595 – RM 3.624 per metric ton.
As in the official statement to Palmoilmagazine.com, some palm oil plantation provinces in Indonesia, such as, South Sumatera, Riau, West Kalimantan, and Central Kalimantan were in flame. The government through Directorate of Law Enforcement Ministry of Environment and Forestry did seal the fired plantations. The authority is doing the best to extinguish the fire.
Analysis by Reuters predicted that United States Department of Agriculture in its report that would be released on 12 October would minimize corn and soyoil harvest prediction in the country. (T2)
