Pekanbaru, Riau (Antarariau.com) - The Riau regional plantation office said the price of crude palm oil (CPO) has been picking up in the past six months to follow the trend in international market.
"The increase was also attributable to the 12th Indonesian Palm Oil Conference (IPOC) held in Bali in Nov. 23-25 this year," head of the plantation office Ferry H.C. Ernaputra said here on Wednesday.
Ferry said experts predicted that the rising trend would continue in the next six months on growing consumption of CPO for biodiesel industry in Indonesia with the mandatory B25 biodiesel mix.
In addition, uncertainty in supply as a result of the weather phenomenon El Nino will also determine the price developments, he said.
Price analysis by agribusiness consultant of LMC International Ltd. James Fry said that the CPO price in the first quarter of 2016 was around US$600 per ton FOB. when the price of Brent crude oil was around US$50 per barrel.
The price could increase US$50-US$75 per barrel in the first quarter of 2017 of state-owned oil and gas company PT Pertamina is consistent in increasing its demand for biodiesel and CPO production did not rise too high, Ferry said.
He did not even rule out the possibility of CPO price surged to US$800 per ton FOB if the impact of El Nino continued unabated.
Thomas Mielke, an analyst from Oil World Bulletin predicted that CPO supply in the world market grew only 1 million tons in 2017.
"The increase is not proportional with a 30 percent growth in consumption in the food and energy sectors. If this is to take place, vegetable oil traders would depend much on soybean oil supplies," Thomas said.
CPO price has remained low over the past several years on weak demand on the global market.
Indonesia is the world s largest producer of CPO and CPO is the country s major export commodity.
CPO Price Picking Up In Riau In The Past 6 Months
