The world's largest producers of crude palm oil, Malaysia and Indonesia, have committed to cooperate to stabilize CPO prices after they fell drastically last month, Malaysia's Bernama news agency reported Tuesday.
The two countries produce 90% of the world's palm oil.
Details of the cooperation are yet to be finalized but a meeting between Malaysia's Plantation Industries and Commodities Minister Bernard Dompok and Indonesia's Agriculture Minister Suswono in Jakarta Monday discussed CPO prices.
The Malaysian CPO price was MR2,223.50/mt ($722/mt) Tuesday, up from MR2,200/mt Monday, according to data published on the Malaysian Palm Oil Board website.
The Bernama report quoted Dompok as saying that the Malaysian CPO price had fallen drastically last month attributing this to the slowing global economy coupled with weaker demand from major importers such as China.
The Malaysian CPO price plunged to a 25-month low September 20 according to data published on the website. The CPO price ended September 20 at MR2,620/mt, down MR47.5/mt day on day from MR2,667.50/mt. The last time it was lower was on July 29, 2010, when it was MR2,587/mt.
Separately, the Indonesian Palm Oil Association, or Gapki, Executive Director Fadhil Hasan told Platts Wednesday that the Indonesian palm oil price was similar to the Malaysian CPO price. "I think the Indonesian palm oil price is about 10% below the Malaysian price, but is similar," he said.
He added that the CPO price in Indonesia had softened in tandem with the Malaysian CPO price as demand was waning.
The Bernama report said Malaysia produced 18.9 million mt of CPO in 2011, while in 2012, production is estimated at 18 million mt. In Indonesia, 2011 CPO production was 22.5 million mt and it is set to produce 22.6 million mt in 2012, the report added.
