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Malaysian plantation companies with large Indonesian holdings are unable to fully capture current high crude palm oil prices because of Indonesia's new 20% domestic obligation at fixed prices. CPO futures hit a record intraday high of RM5,700 per tonne before closing at RM5,587.
The obligation took effect on 3 February 2022 to curb rising domestic cooking oil prices, which were up about 40% year on year.
The domestic obligation caps the price on a share of Indonesian output, limiting the benefit of high global palm prices and widening the domestic discount.
focusmalaysia.myCheah Chor SooiFeb 3, 2022After 513 past neutral policy events, Palm Oil moved a median 0.0% over 5 sessions (50% higher; middle half -1.6% to +1.4%), and -0.1% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
