InfoSAWIT, JAKARTA - The gap of consumption and production of vegetable oil in the world becomes the classical issue. This happens because the consumption level is always more than 10% in every single year while the production level could be about 6% in every year. The gap level of the two is the reason to make vegetable oil get more expensive.
The opposite condition may take place to the vegetable oil markets or it is always called as, one decade cycle. The vegetable oil could be over-production, hardly close to the demands in the year. It happened in 2018. The vegetable oil, including palm oil was over production and this made the price get cheaper.
For the stakeholders, the condition in 2018 could actually be anticipated in the previous days. But the traders and the big traders would get big losses because of the cheaper commodity. The facts showed, the cheaper commodity takes place in every day while the buying of crude palm oil (CPO) and its derivatives should follow the previous agreement.
As the result, they got double losses because of the gap of selling and buying price. For example, the CPO today’s buying is US$ 600/ton but when selling it, it may be US$ 580/ton. The gap is – US$ 20/ton and times the tonnage to be sold. (T1)