Thursday, November 13, 2008

The CPO price already hit the lowest price

At this time the raw palm oil price has predicted reach the limit  of the lowest price. Therefore, it is expected that in the last two months in 2008 the price of CPO will be increased.

Acceleration of using bio-diesel and replanting of 250,000 hectares of oil palm plants in Indonesia and Malaysia are the two main factors that will make the CPO price competitive.

Vegetable oil analysist, which is based in Hamburg, Germany, Thomas Mielke, revealed that in Kuala Lumpur last week. He explained, the implementation of biodiesel on a large scale will slowly reduce the influence of fluctuations in crude oil prices of CPO.

According to Mielke, CPO prices are not moving in line crude oil prices since the second semester 2007 to first semester 2008. CPO price which lower 60 percent than soybean oil prince, intended to encourage demand for CPO.

At the end of October, the price of CPO in Malaysia are on the lowest point during the last three years, US$ 375 per ton. This price is drop almost 70 percent from the peak price in March.

In Jakarta, Monday (10/11/2008), Chairman of the Joint Entrepreneur Daily Kelapa Sawit Indonesia (Gapki) Derom Bangun said, the price of CPO during the two began to rise last week from Rp 4,100 to Rp 5,053 per kilogram. Industrial processing of raw materials CPO in Europe, which have reduced production due to the crisis, is now working again to meet orders at Christmas and New Year.

This situation had a positive impact on the CPO market, which became one of the raw material of soap, margarine, cosmetics, toothpaste, mixing until brown. "Exports to Europe gradually increased again," said Derom Bangun.

According to Executive Director of the Joint Industry Indonesian vegetable oils (GIMNI) Sahat Sinaga, the demand for CPO is gradually began to rise. This reduces the stock of CPO. Demand was weak because of lack of liquidity importers to buy the CPO.

One of the demand largest factors  of CPO is the policy to mix 5 percent biodiesel in Indonesia and Malaysia. The current abundant stock of the CPO will absorb for biodiesel production in the future.

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