KUALA LUMPUR, Aug 11 ― Malaysia will continue to see intense competition in the crude palm oil market from Indonesia as the country will be flushing out its bloated inventory ahead of its seasonal peak production months.
“As the August CPO reference price was also slashed to US$872.27 per tonne, its export duty was drastically cut to US$52 per tonne from US$288 per tonne to help boost its exports. “However, the August palm oil stock was below our forecast due mainly to higher-than-expected exports as Indonesia producers may have delayed exports in anticipation of lower export tax.
“However, the downside will be capped by current CPO wide pricing discount of US$290-US$320 per tonne against soybean oil,” said CGS-CIMB. “The CPO price decline could have been slightly overdone, having fallen by 44 per cent in seven weeks ― which is much more than the decline in soybean, crude oil and wheat prices .