JAKARTA (Commodity Online): Crude Palm Oil (CPO) price to move further down as Indonesia, the worlds biggest palm oil exporter, is likeky to increase the sales of refined palm oil (RPO) to price sensitive nations like India, china, pakistan etc which would create less demand for CPO's.
Earlier, Indonesia had cut down the export tax over the refined goods and increased the export tax of Crude Palm Oil (CPO) to promote the sales of refined palm oil.The price of crude palm oil has dropped in 2011 on having higher harvest and also due to fear of curbbing demand on global economic crisis.
"The country will find a much bigger market share especially in price-sensitive nations like China, India and Pakistan and there will be some buildup in CPO stocks and once that happens, it will definitely depress prices." said Mohammad Jaaffar Ahmad, chief executive officer, Palm Oil Refiners Association of Malaysia Reported Bloomberg Business Report.
The export of refined oil from Indonesia would reduce the market for for Malaysian traders.If this happens the crude palm oil stockpile will increase in Malaysia depressing the CPO price.
The refineries in Indonesia has already enhanced their production.Some Malaysia companies were also looking to invest in refineries in Indonesia.
Indonesia and Malaysia contributes 80% of the World's palm oil.
