KPB Nusantara, the joint marketing office of state plantations, sold all five CPO packages (4,000 tons) at Rp8593\/Kg (net) Monday (Apr 4), the new high, even though rupiah appreciated against US dollar.<\/p>\n

That means net price for local market was US$654 per ton, getting closer to the level where the Government may impose export excise (US$700 per ton).<\/p>\n

The benchmark June 2016 contracts of CPO, meanwhile, advanced RM25 to RM2773 per ton on the Bursa Malaysia Derivatives. July contracts also gained RM25 to RM2762 per ton, while September onwards were still below RM2700 per ton.<\/p>\n

Earlier in Rotterdam, the commodity retreated to US$733 per ton (CIF) late last week, but this is still a new high in more than one year, as soybean oil also advanced to its new high on the Chicago Board of Trade.<\/p>\n

Plantation shares, on the other hand, opened the week in mix. Eagle High Plantation (BWPT) suffered almost 10% fall with 182 million shares exchanged hands, while Felda Global gained 2% in Kuala Lumpur. Golden Agri-Resources advanced 1.2% in Singapore, but Astra Agro Lestari and PP London Sumatra retreated 3.6% and 2.2% respectively in Jakarta.<\/p>\n

<\/a><\/p>\n

Some were worried that palm oil would follow crude oil, which fell significantly in the past few trading days. Others, however, believe lower CPO output would continue to support the commodity, at least in the short-medium term. Genting Plantations Berhad, for example, harvested 98,819 tons of FFBs last month, down 0.5% from February 2016, but collapsed 20.6% from March 2015.<\/p>\n

The upcoming fasting month (starting early June) and Lebaran holidays (early July) might also support palm oil in the next few\u00a0months. An anticipated seasonally higher output in the third quarter might lead to corrections later on.<\/p>\n

Higher CPO prices amidst downfall of crude oil might affect Indonesia’s mandatory biodiesel program though. While the State Budget sets aside higher subsidies for the program, they might not be enough to encourage state-owned oil and gas company Pertamina to purchase more.<\/p>\n

DISCLAIMER: NO POSITION IN STOCKS MENTIONED IN THIS ARTICLE<\/p>\n","protected":false},"excerpt":{"rendered":"

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