Tuesday, December 4, 2007

Today's Oil Palm Price

As at point of writing, the price of oil palm at Mill Gate , where farmers send their fresh fruit bunches for Bintulu area is RM 604/tonne ( see above).
The price today has doubled since more than one and a half year ago! This escalating price is good news for the oil palm farmer. As a general rule of thumb, the oil palm farmer will typically sell his fresh fruit bunches (FFB) at 1/5 of the quoted crude oil palm price (CPO) which stands at RM 3000/tonne today.
What are the chances that it will stay favourably in the near future?
Judging from recent reports by Moody's Investors Servic, for 2008 the high demand and pricing will prevail for the following reasons:
1) increased consumption in emerging Chindian markets ( China and India )
2) demand for crude palm oil as bio fuel source ( e.g. Europe )
Besides ,I think market speculation on resource or commodity -based stock exchange counters due to palm oil enjoying evaluation as 'good assets' help prop up sentiments of oil palm as a prospective commodity investment.
All told, isn't these signs of positive economic redress for the Malaysian political economy? i.e.
increased income for the rural household.

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