ILLUSTRATION. On Friday (7/17), the price of CPO at Bursa Malaysia Derivatives was at the level of RM 2,614 per ton.
Reporter: Aerospace Hikma | Editor: Wahyu T. Rahmawati
KONTAN.CO.ID – JAKARTA. The past week is a good week for the price crude palm oil (CPO). Because the price of CPO recorded a significant jump and at the close of trading on Friday (7/17), the price of CPO for October 2020 delivery contracts on the Malaysia Derivatives Exchange was at the level of RM 2,614 per ton.
This level is the highest in the last five months, or precisely since February 21 ago. Central Capital Futures analyst Wahyu Laksono said rising CPO prices were driven by concerns about falling production.
On the other hand, in terms of demand actually began to increase. “Malaysian CPO exports in July 1-15 have dropped 9-10% compared to the previous month which indicates a decline in production. Strengthening is also driven by the sentiment of biodiesel, “Wahyu said to Kontan.co.id, Sunday (7/19).
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Wahyu said, PT Pertamina had succeeded in producing batch the first biodiesel made from 100% CPO (D100) at the Dumai oil refinery last week. Going forward, Pertamina plans to produce D100 with a target of 1,000 barrels per day.
Therefore, Wahyu assessed that with the improvement in global commodity sentiment, rising demand for CPO, and biodiesel sentiment, CPO prices will still be able to rise again.
It’s just, Wahyu said, there is a tendency in the third quarter of 2020, the amount of inventory will return to the level of two million tons in the next month considering the industry will go into peak production. Under these conditions, export demand will weaken due to activity restocking which is also weakening next month.
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“So that the future price of CPO will experience rebound limited by the threat of correction at higher levels. At present the CPO will test the level of RM 2,700 per ton, but the level of RM 2,400-RM 2,500 per ton could be the consolidation level, “Wahyu explained.
With this condition, Wahyu recommended a strategy trading if near or below RM 2,400 per ton it can buy on weakness. Meanwhile, if it is close to or above RM 2,700 per ton it can sell on strength.
Also Read: Supply is reduced, the price of CPO is able to penetrate RM 2,616 per ton
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