CPO PRICE OCT 17: Palm Oil Jumps Over 4% as Diwali Festival Nears

The CPO futures contract for December 2016, the most actively traded contract on Bursa Malaysia, was seen jumping 4.14% or 110 points to the level of 2,770 ringgit per ton at 10.24 WIB, the highest level throughout the contract period.The price of palm oil previously opened up 3.27% or 87 points to the position of 2,747.
Meanwhile, the price of palm oil during the Friday (14/10/2016) trading closed with a sharp increase of 1.60% or 42 points to 2,660.
As reported by Bisnis.com, the import of palm oil or CPO from India is expected to increase for the first time in the past five months due to decreasing stock and increasing demand leading up to the festival. This sentiment provides positive momentum for the price of CPO.
The Bloomberg survey indicates that CPO import from Hindustan is expected to increase by 2.1% to 800,000 tons in September. This figure is the first increase since April 2016.
Nagaraj Meda, Managing Director of TransGraph Consulting, said that the rebound in CPO purchases from India as the world's largest consumer helps the price remain high despite being blocked by the recovery in production. The dry weather impact from El Nino previously disrupted the planting process in Indonesia and Malaysia in the beginning of the year.
Demand from India usually increases during the Hindu festival from September through November, as people consume more fried foods and sweets. The highlight of the celebration occurs during the Diwali Festival which falls on October 30, 2016.
Thomas Mielke, Executive Director of Oil World, said that in addition to India, absorption of CPO demand will also come from China. The number of palm oil stock in The Panda Country is currently considered low in the range of 350,000--400,000 tons.
`China must purchase CPO because its stock is quite low,` he said.
On the other hand, the exchange rate of the ringgit this morning was seen decreasing by 0.58% to 4.2192 per US dollar at 10.39 WIB, after opening down 0.32% in the position of 4.2080.
The Price Movement of CPO for the December 2016 Contract




Date


Level


Change



17/10/2016(10.24 WIB)
2.770
+4,14%



14/10/2016


2.660


+1,60%




13/10/2016


2.618


-1,32%




12/10/2016


2.653


+1,61%




11/10/2016


2.611


+2,71%




Source: Bloomberg
Editor: Linda Teti Silitonga
http://market.bisnis.com/read/20161017/94/593102/harga-cpo-17-oktober-festival-diwali-mendekat-minyak-sawit-melonjak-di-atas-4-persen