Commodity analysts at Citi Group said last October than thermal coal prices were close to rock bottom as coal producers have squeezed almost all of the gains from increased productivity, lower fuel prices and weaker currencies (Platts, October 5th, 2015). They also predicted thermal coal prices to stabilise in 2016. Reference price of Indonesian thermal coal in the first half of 2016 might be a confirmation of such analysis.

Weak prices of commodities was one of factors leading to Indonesia’s ‘failure’ to get a rating upgrade from S&P, because it affects outlook of revenue side of the State Budget, hence prospect of government spending in infrastructure, among others. This is, of course, an external factor nothing the government can do about.

The benchmark August 2016 contracts of crude palm oil (CPO) advanced RM20 to RM2620 per ton on the Bursa Malaysia Derivatives Tuesday (May 31), supported by firm soybean oil and crude oil. Contracts for September onwards, however, were settled below RM2600 to reflect expectations of short-term corrections on potential higher supply in the third quarter.

Soybean oil advanced 1.13% on the Chicago Board of Trade Monday (May 30), while the benchmark August contracts of crude palm oil (CPO) jumped RM40 to RM2599 per ton earlier on the Bursa Malaysia Derivatives.

Market players anticipate closing of the long-delayed transactions between Malaysia’s plantation giant Felda Global Holdings and Indonesia’s Rajawali Corpora (owned by tycoon Peter Sondakh) related to shares in PT Eagle High Plantations (BWPT) Tbk and plantation assets of Rajawali Corpora.

WTI and Brent crude oil moved closer to US$50 per barrel on Nymex Wednesday (May 25) to respond falling supplies in the United States. They gained 2.3% and 2.65% respectively as the Energy Information Administration reported 4.2 million fall of crude oil supplies in US for the week ended May 20.