CPO price higher on demand from China
The Star Online (23/10/2018) - PETALING JAYA: The price of crude palm oil (CPO) climbed for the first time in three days yesterday, boosted by stronger soybean oil prices and optimism about demand from China.
At the close, the benchmark futures contract for CPO on Bursa Derivatives rose RM13 to RM2,237 a tonne. The price of soybean oil on the Chicago Board was up 0.3% at 29.22 cents a lb.
According to a Bloomberg calculation, soybean oil’s premium over CPO has increased to US$106 a tonne, versus an average of US$91 over the past year.
Meanwhile, in Parliament yesterday, Bernama reported that the trade conflict between the US and China is expected to benefit palm oil.
The conflict, the report said, quoting the Primary Industries Ministry, has resulted in China importing less soybean oil from the United States, hence creating a shortage of the edible oil in the country.
But the situation has benefitted Malaysia which saw higher demand from China for palm oil, the closest competitor to soybean oil, said the ministry in a written reply to Wong Ling Biu (PH-Sarikei) in the Dewan Rakyat yesterday.
“Malaysia’s export of palm oil to China rose 9.3% to 1.81 million tonnes between January and August 2018 compared with 1.65 million tonnes exported during the first eight months of 2017.
The ministry also said the export of palm kernel cake from Malaysia also benefitted from the trade conflict as China stepped up import by 57% to 127,195 tonnes during the same period against 81,039 tonnes it imported in the corresponding period last year.
China, the biggest importer of soybean oil from the US, would turn to Brazil to meet its requirement, nevertheless, it would still not be able to meet the country’s massive demand for the vegetable oil. — Bernama