PALMOILMAGAZINE, MUMBAI – The increase in crude palm oil (CPO) contract prices at the Malaysia Derivatives Exchange on Friday, October 13, 2023, was primarily attributed to two key factors: a depreciating Malaysian ringgit and growing demands from China.
Furthermore, this upward trajectory was bolstered by Indonesia, the world’s leading CPO producer, confirming its decision not to mandate that all export activities must exclusively originate from the Indonesian CPO exchange. This assurance helped alleviate concerns about supply pressures.
According to Reuters, the CPO reference contract price, identified by the code FCPOc3, set for December 2023 delivery at the Malaysia Derivatives Exchange, witnessed a significant rise of RM 46 per ton, translating to a gain of approximately 1.26%.
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This pushed the CPO price to RM 3,684 (US$ 778.69) per metric ton during the midday lunch break. Notably, this increase followed a remarkable surge of 2.5% observed on Thursday.
This week, ringgit currency hit the lowest level since on 23 June to be RM 3.520.
A vegetable oil trad in Mumbai said that CPO is in oversold situation and this got support from the cheaper ringgit currency. “And China increased its purchase,” he said, as quoted from Reuters.
Cargo surveyor released data and showed that palm oil product export from Malaysia on 1 – 10 October increased 12,5% to be 29,6% from the previous month,
Soyoil at Chicago Board of Trade BOc2 also increased 0,79% at 04.36 GMT (Greenwich Mean Time).
Indonesia launched its CPO exchange on Friday (13/10/2023), but it is not obligation for stakeholders to get into it. Minister of Trade Indonesian Republic, Zulkifli Hasan said to reinforce CPO trade, the government took significant initiative by designing CPO trade substitution in CPO exchange. The goal is very clear which is to get transparent, fair, accountable, and real time CPO price. It should involve many traders, starting from the sellers and also buyers.
“The Regulation of Commodity Futures Trading Supervisory Agency Number 7 / 2023 about CPO trade procedures in exchange would be voluntary. We have to be used to that the government regulates only. We should not oblige (every party) but we hope the cooperation and collaboration to deliver interests for our other friends and for our same interests,” the man called Zulhas, said. (T2)