PALMOILMAGAZINE, SINGAPORE – The Crude Palm Oil (CPO) reference contract price at the Malaysia Derivatives Exchange surged on Friday (3/11/2023) due to growing concerns about a supply shortage, which overshadowed worries about declining food imports to India and reduced demand in China.
According to information from Reuters, the CPO reference contract with the code FCPOc3 for January 2024 delivery at the Bursa Malaysia Derivatives Exchange reached RM 3,784 per metric ton (equivalent to US$ 798.82) during the midday break. This represents a 0.2% increase over the past week and marks the fourth consecutive week of rising prices.
Pranav Bajoria, the Director of Comglobal in Singapore, noted that the palm oil supply shortage was more pronounced in the stock exchange compared to other vegetable oil prices. Additionally, Isy Karim, the General Director of Internal Trade at the Ministry of Trade of the Indonesian Republic, confirmed that Indonesia would continue to enforce the Domestic Market Obligation (DMO) for palm oil until 2024 to maintain stability in palm cooking oil prices. This policy was implemented last year to control price fluctuations, allowing palm oil producers to export their products once they successfully fulfilled the DMO requirements.
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Furthermore, according to Reuters, the price of soyoil contracts at the Dalian Exchange with the code DBYcv1 increased by 1.6%, while CPO contract prices with the code DCPcv1 saw a 1.7% rise. Soyoil prices at the Chicago Board of Trade (BOcv1) also increased by 0.5%.
The palm oil market is closely connected to other vegetable oil prices, as they compete for a share of the global vegetable oil market. According to Reuters, six traders reported that vegetable oil imports to India in October 2023 reached their lowest level in the past 16 months, as the country had accumulated higher stockpiles and encouraged refineries to limit their vegetable oil purchases. (T2)