Crude Palm oil, edible oil that derived from the reddish pulp of the oil palms. It is worlds cheapest and most widely used edible oil, used in foods, beauty products as well as biofuel. FCPO is traded in a secure and transparent marketplace regulated by the SCM.
BMD Crude palm oil Futures (FCPO) is the global benchmark for the pricing of Crude Palm oil. Price matched on CME Globex electronic trading platform to easy access to global market participants. Palm oil market size is estimated to be $ 81.9 billion in 2019 , growing at a CAGR of 6.0% during the forecast period 2020-2025.
On Tuesday, Malaysia being world’s Second largest Palm Oil Producer kept its export tax for crude palm oil at 8% for September. Based on the tax structure, no export duty will be imposed on any CPO price below 2,250 ringgit (503.69 dollars) per tonne. The maximum tax rate is 8 percent when the CPO prices are above 3,450 ringgit (772.33 dollars) per tonne.
Moreover the demand for Palm Oil increased in first week of August due to increase in prices of Rival Oils due to production concerns in the U.S. and supply disruptions from the Black Sea region, industry officials said. This increase in demand is expected to help Indonesia and Malaysia in bringing down their palm oil inventories, simultaneously supporting FCPO.
According to Intertek Testing Services, total palm oil exports surged by 19% M-OM between 1 to 25th August. Exports to the EU soared by 117% while exports to India grew by over 8%. This increase is due to the discounts in palm oil compared to other edible oils such as Soybean, sunflower.
As per the statistics, there is a strong possibility that prices may rise above RM4,300 a metric ton, MPOC deputy director Mohd Izham Hassan said in a webinar. The reason for the same can be market uncertainties including those surrounding Black Sea sunflower oil supply and Malaysia’s palm oil production that has remained below expectations, Mohd Izham said.
Malaysia’s benchmark crude palm oil futures have declined 7% so far this year.