JAKARTA – The Indonesian Palm Oil Association (GAPKI) said the production increase of other rival vegetable oils has become one of the factors that caused the average price of crude palm oil (CPO) higher than the average prices of other vegetable oils at the global market. Such trend has been seen since October 2023.
“The price of sunflower is lower than that of CPO. I found it was proved in Uzbekistan, China, and India. There the price of sunflower was cheaper, despite the fact that palm oil production was very high. But why the other vegetable oils are cheaper?,” he said.
“It’s because of Indonesia’s export ban. They needed to keep their food resilience. They intensified planting what they can plant for such purpose. As a result the production of sunflower rose significantly,” he said.
Eddy said that it was not only the sunflower that saw production increase. The rapeseed oil and soybean oil also saw a significant rise. “During January – February 2024, the prices of sunflower, rapeseed, and soybean were lower than the CPO,” he said.
Growingly uncompetitive
According to Eddy, Indonesia’s palm oil products are increasingly not competitive at the global market, due to many unsupportive policies, such as the domestic market obligation (DMO), which hamper the palm oil exports. It has been worsened by the fact that China and India, as Indonesia’s largest palm oil importers, started seeking for alternatives of palm oil.
“Such factors made us less competitive than our neighboring country Malaysia, which is also major producer and exporter of CPO. I think we need to address the issue of policies, reduce the palm oil export levy (PE) and export tax (BK) to the level that will make our palm oil more competitive at the global market,” he said.
Early this week (Monday, 29/04/2024), the CPO price rose, after seeing an increase during previous trading day. The price of CPO at Malaysia future exchange for the next three-month delivery reached MYR 3,921/ton, an increase of 0.64% compared to that of last week. The CPO price rose for two consecutive days, lifting the price by 1.21%. But the price increase was not high enough to free the CPO price from negative trend. During the last week, the price dropped by 2.04% point-to-point. During last month its price decreased by 10.33%.
The high supply still pressured the price of CPO. In Malaysia, Southern Peninsular Palm Oil Millers Association (SPPOMA) reported that CPO production during 1—25 April rose 4.11% compared to that of the same period at the previous month. As of Thursday (02/05/2024), based on Trading Economics, the price of rapeseed reached US$388.39/ton, a decrease of 0.01% from that the previous day. The price of sunflower reached US$862.80/ton, a decrease of 3.90%, while the price of soybean reached US$1,141/bushel or a decrease of 0.38%. (*)
Source: sawitkita.id
