Indonesia is the world’s largest CPO producer, unable to do anything because Malaysia sets the price – Archyde

Illustration of activity in oil palm plantation. It turns out that crude palm oil (CPO), the product of palm oil plantations in Indonesia, is priced by Malaysia. (Source: Kompastv/Ant)

JAKARTA, KOMPAS.TV – The rise in cooking oil prices in recent months has come under the public spotlight. Until many associate it with crude palm oil or palm oil raw palm oil (CPO).

According to the manufacturer, the cooking oil that is currently so expensive is actually due to the adjustment in global CPO prices, where demand is increasing but supply is insufficient.

This condition certainly reflects an irony considering that Indonesia itself has been the world’s largest palm oil producer since 2006, overtaking Malaysia, which has held that position for years.

So why, as the largest producer, Indonesia cannot meet the high demand for CPO, leading to an increase in the price of edible oil in the market?

Also read: Gapki predicts CPO prices will continue to rise through March 2022

It is not Indonesia that determines the CPO price, but Malaysia

The answer to the above question is because Malaysia has the power to price global palm oil commodities including CPO, which is the largest contributor to Indonesia’s foreign exchange exports.

Bursa Malaysia Derivatives (BMD) allows neighboring countries to control the price of oil palm plantations in Indonesia with CPO futures contracts.

In addition to BMD, the price of Indonesian palm oil also refers to the commodity exchange in Rotterdam, the Netherlands.

BMD’s past influence on the ebb and flow of global palm oil prices is not without reason, as Malaysia was previously the world’s largest CPO producer.

In fact, with BMD’s official website, they have been trading CPO commodities since October 1980.

Leave a Reply

Your email address will not be published.