Fluctuation of Palm Oil Prices Due to the Second Wave of Covid

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Since the second half (H2) of 2020, the price of palm oil (CPO) has continued to increase as indicated by the CIFF Rotterdam price of CPO was reached USD 954 per ton in December 2020. This is a blessing felt by palm oil producers, both companies and smallholder oil palm farmers in the amid of the pandemic. Even, smallholder farmers have also enjoyed a higher FFB price ranging from IDR 1,500-2,000 per kilogram.

palm oil prices

The high CPO prices trend also continues in the first quarter of 2021. This is indicated by the CIFF Rotterdam price of CPO in March 2021 reached USD 1,116 per ton. Not only that, the closing price of CPO for August delivery contracts on May 12, 2021 in the Bursa Malaysia Derivative reached RM 4.506 per ton. This price is the highest level in the last decade.

However, the fluctuation of CPO prices on the Bursa Malaysia Derivative reoccured with an extreme downward trend to RM 3,890 per ton on May 24, 2021. One of the causes of this decline in CPO prices was the spike in the number of covid-19 cases in the second wave that hit various Asian countries, where these countries play an important role in the global palm oil market.

India as the largest palm oil importer in the world, is currently dealing with the second wave of Covid-19 which is much more severe than the first wave. Update as of May 27, 2021, India is currently the global epicenter of the coronavirus pandemic with the number of Covid-19 cases more than 27 million cases with additional cases per day reaching more than 52 thousand cases. The emergency status in India and implementation of lockdown policy is also still being extended until May 31, 2021.

Not only India, Malaysia, which is also the second-largest producer and exporter of palm oil in the world, is also facing a spike in the number of Covid-19 cases has reached 7 thousand cases per day. This made this Malaysian Government enforce a lockdown policy until June 7, 2021.

The restrictions on social and economic activities in public areas including the hotel, restaurant, and catering (Horeca) sector in the lockdown policy that are implemented in India and Malaysia have a significant impact on palm oil demand because this sector absorbs large demand for palm oil. The decline in demand is one of the factors that has caused the decline in CPO prices on the Bursa Malaysia Derivative, considering that they are the top players in the global palm oil market.

The decline in the CPO’s contract price has also become a negative sentiment, which directly affected the shares of palm oil companies that are under threat in the red zone, for example are SGRO (-2.58%) and SSMS (-1.12%).

 

CPO contract price fluctuations for delivery in August 2021 with a positive trend occurred again. The closing of the Bursa Malaysia Derivative on May 25, 2021, shows the CPO price has reached RM 3,898 per ton. Even though the CPO price level has not yet reached RM 4,000 per ton, this price increase is expected to boosting optimism in the palm oil industry.

Several driving factors of the increase in CPO prices were the increase in crude oil prices in the last few days where the price of Brent was approaching USD 70 per barrel. Apart from fossil oil, soybean oil on the Chicago Board of Trade also increased by 1.24%. The increase in the price of substitute products is one of the factors that have contributed to the increase in CPO’s price. On the other hand, there was an increase in Malaysian palm oil exports on May, 1-25 of around 0.3%.

CPO price fluctuations are expected tp continue in the future, given the high risk of a spike in the number of Covid-19 cases and the price of substitute products such as soybean oil. Forecaster also predict that a correction in palm oil prices may occur, especially in the second semester of 2021, in line with the increase in palm production so that stocks on the global market is no longer depleting.

Sejak semester 2 tahun 2020, harga minyak sawit (CPO) terus meroket yang ditunjukkan dengan harga CPO CIFF Rotterdam mencapai USD 954 per ton pada Desember 2020. Hal ini tentu saja menjadi berkah bagi produsen baik perusahaan perkebunan maupun petani sawit rakyat di tengah pandemi. Bahkan petani sawit rakyat telah menikmati harga TBS yang lebih tinggi berkisar Rp 1,500-2,000 per kilogram.

palm oil prices

Tren tingginya harga CPO juga masih berlanjut hingga kuartal pertama tahun 2021. Hal tersebut ditunjukkan dengan harga CPO CIFF Rotterdam Maret 2021 yang mencapai USD 1,116 per ton. Tidak hanya itu, penutupan harga CPO di Bursa Malaysia Derivatif Exchange tanggal 12 Mei 2021 untuk kontrak pengiriman Agustus mencapai RM 4,506 per ton. Harga CPO tersebut menjadi level tertinggi dalam satu dekade terakhir.

Namun, pergerakkan harga CPO di Bursa Malaysia Derivatif kembali menunjukkan fluktuasi dengan tren penurunan cukup ekstrim menjadi RM 3,890 per ton pada penutupan tanggal 24 Mei 2021. Amblesnya harga CPO ini disebabkan salah satunya karena lonjakan kasus akibat gelombang kedua Covid-19 yang mewabah di berbagai negara Asia, dimana negara-negara tersebut berperan penting atau top-player dalam pasar minyak sawit dunia.

India sebagai importir minyak sawit terbesar di dunia, saat ini sedang repot menghadapi gelombang kedua Covid-19 yang jauh lebih parah dibandingkan gelombang pertamanya. Update per 27 Mei 2021, India kini menjadi episentrum pandemi virus Corona global dengan jumlah kasus Covid-19 mencapai lebih dari 27 juta dengan tambahan kasus mencapai lebih 52 ribu kasus per hari. Status darurat Covid di India dan implementasi kebijakan lockdown-nya juga masih diperpanjang hingga 31 Mei 2021.

Tidak hanya India, Malaysia yang juga merupakan produsen dan eksportir minyak sawit terbesar kedua di dunia, juga sedang menghadapi lonjakan kasus harian infeksi Covid-19 yang mencapai 7 ribuan kasus per harinya. Hal ini membuat Pemerintah Negeri Jiran tersebut memberlakukan kebijakan lockdown hingga tanggal 7 Juni 2021.

Pembatasan aktivitas sosial dan ekonomi di tempat umum termasuk sektor hotel, restauran dan katering (Horeca) dalam kebijakan lockdown yang diterapkan di India dan Malaysia memiliki dampak yang cukup besar terhadap demand minyak sawit, mengingat sektor tersebut menyerap kebutuhan minyak sawit yang besar. Penurunan demand minyak sawit dari kedua negara tersebut menjadi salah satu faktor yang menyebabkan amblesnya harga CPO di Bursa Malaysia Derivatif Exchange, mengingat kedua negara tersebut merupakan top-player dalam pasar minyak sawit global

Penurunan harga kontrak CPO tersebut juga menjadi sentimen negatif yang langsung berimbas pada saham-saham emiten produsen sawit yang terancam dan berada di zona merah, misalnya saham SGRO (-2,58%) dan saham SSMS (-1,12%).

Fluktuasi harga kontrak CPO untuk pengiriman Agustus 2021 dengan tren positif kembali terjadi. Penutupan Bursa Malaysia Derivatif Exchange pada tanggal 25 Mei 2021 menunjukkan harga CPO mencapai RM 3,898 per ton. Meskipun, level harga CPO belum kembali mencapai RM 4,000 per ton, namun peningkatan harga ini diharapkan dapat meningkatkan optimisme para pelaku industri sawit.

Beberapa faktor penggerek naiknya harga CPO antara lain adanya kenaikan harga minyak mentah dunia pada beberapa hari terakhir dimana harga Brent mendekati USD 70 per barel. Selain minyak fosil, minyak kedelai di Chicago Board of Trade juga mengalami peningkatan sebesar 1.24%. Peningkatan harga produk substitusi menjadi faktor yang turut mendorong harga minyak sawit yang kembali meningkat. Di sisi lain, terjadi peningkatan ekspor minyak sawit Malaysia periode 1-25 Mei sekitar 0.3%.

Diperkirakan fluktuasi harga CPO akan terus terjadi ke depan, mengingat masih tingginya resiko terjadi lonjakan kasus Covid-19 dan harga produk substitusinya seperi minyak kedelai. Para ahli forecasting juga meramalkan bahwa koreksi harga minyak sawit dapat terjadi khususnya di periode semester kedua tahun 2021 seiring dengan meningkatnya produksi sawit sehingga stok di pasar dunia tidak lagi menipis.

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