crude palm oil price, page-12

I'll start by mentioning a conversion factor

RM25 per Tonne of CPO is equivalent to $1US per BBL


Next a few comments about the factors driving the price of Crude Palm Oil

1... Demand as a source for Biodiesel. Reading any reports in the local media over the last 12 months would indicate that this is the main reason. As most of us are aware, the majority of the Biodiesel Plants have been on hold over the last 12 months. MBT is one of the few companies that has recently started to refine Palm Oil to produce Biodiesel.

2... "Supply and Demand" factors. It should be realised that as the economies of the world go into a decline the "Demand" factor for Palm Oil will be reducing without necessarily reducing the supply. The Price will go down. Of course the demand for Crude Oil will also go down, but OPEC have the advantage that they can reduce supply to keep the price down. We should see the margin between Biodiesel* prices and Palm Oil price increasing in this case

3... The "Futures Market" which can be considered the "Greed Factor". I believe this has been the major influence on the prices of Crude Palm Oil and which forced it to the almost unbelievable RM4000+ prices seen earlier this year.


It could also be noted that we should really be comparing the price of Biodiesel with the price NFL would be paying for Palm Olein but we can use the Crude Oil and Crude Palm Oil prices as a reasonable guide as to where things are heading.

Remember also that a change of RM200 per Tonne in a day which often seems to be happening at the moment, is equivalent to about $A40 million per year if all three plants were running at full capacity. I really do think unless they can get some "tolling" opportunities with a good pay off factor they will be waiting for all these prices to settle down.


As for people selling in the current climate, to me it really beggers belief but some people and companies could be in a lot of financial stress at the moment.