Rising CPO Prices Affected By Increased Demand From India

Director General of Foreign Trade of the Ministry of Trade Isy Karim. (Photo: Mery Handayani/VOI)

JAKARTA - The Ministry of Trade (Kemendag) noted an increase in the reference price (HR) of palm oil (CPO) commodities which was influenced by the large demand from India and China which was not matched by the amount of production.

The Director General of Foreign Trade of the Ministry of Trade, Isy Karim, said that HR CPO for the determination of Customs and Exit (BK) and Export Levy (PE) for the period 1-31 October 2024 was 893.64 US dollars per MT.

This value increased by 54.11 US dollars or 6.45 percent from the September 2024 period which was recorded at 839.53 US dollars per MT.

"This increase in HR CPO is influenced by increased demand, especially from India and China, which are not balanced with increased production. On the other hand, production decline is due to a long dry season," said Isy as quoted by ANTARA, Wednesday, October 2.

Currently, HR CPO has increased away from a threshold of US$680 per MT. For this reason, referring to the current Minister of Finance Regulation (PMK), the government imposed a BK CPO of US$74 per MT and a CPO PE of 7.5 percent of HR CPO October of US$67.02 per MT for the period 1-31 October 2024

The source for the determination of HR CPO comes from the average price during the period August 25-24 September 2024 on a number of referrals, namely the CPO exchange in Indonesia amounting to 857.25 US dollars per MT, the CPO exchange in Malaysia amounting to 930.03 US dollars per MT, and the CPO Rotterdam auction market amounting to 1,040.70 US dollars per MT.

Cooking oil (refined, bleached, and deodorized/RBD palm olein) in branded packages and packaged with a net weight of 25 kg is subject to 0 US dollars BK per MT.

The determination of the brand for the product is listed in the Decree of the Minister of Trade Number 1331 of 2024 concerning the List of RBD Palm Olein Brands in Branded Packaging and Packed with a Netto Weight of 25 Kg.

Meanwhile, the HR cocoa beans for the October 2024 period was set at 7,581.49 US dollars per MT, down by 335.42 US dollars or 4.24 percent from the previous month.

This has an impact on decreasing the Export Patokan Price (HPE) of cocoa beans in October 2024 to 7,167 US dollars per MT, down 311 US dollars or 4.16 percent from the previous period.

"The decline in HR and HPE cocoa beans was due to increased production, especially in West African countries and strengthening the US dollar," said Isy.

Furthermore, HPE skin products for the period October 2024 did not change from the previous month.

Meanwhile, HPE wood products increased in several types of wood, namely sawwood with a cross section area of 1,000-4,000 mm2 of the meranti type, Merbau, other sort of styling forest, gemelina, acacia, and sengon.

HPE that comes down are veneer wood from natural forests, forest plants, wooden sheet for packing box, and sawwood with a cross section area of 1,000-4,000 mm2 of mixed forest species, other sort of sortiments such as ebony, teak, and from forest plants which include rubber, balsa, and eucalyptus.