CPO price may increase in 2007

Jakarta (Antara News) - Crude palm oil price in 2007 will likely rise on account of a high demand for the commodity in the world market when all the while its production capacity is not on par with the demand, an official said.

The possible high demand for CPO this year may come from India and China as well as European countries, Indonesian Oil Palm Businessmen Association (GAPKI) executive chairman Derom Bangun said here Tuesday.

"Today, in some countries CPO has not only become raw material in food industry but also in biofuel producing sector," he said.

He predicted Indonesia would produce 16.4 million tons of CPO in 2007 and the demand for the commodity may be greater than the production.

He also forecasted that CPO price in Indonesia may reach Rp5,000 (US$0.5) per kilogram in 2007 and world CPO price may increase from US$555 per ton to more than US$600 per ton.

Meanwhile, Joint Marketing Office Managing director of state plantation firm PT Perkebunan Nusantara Bagas Angkasa predicted local CPO price would rise to Rp4,500-Rp5,500 per kg in 2007, increasing from Rp4,120 per kg in 2006.

Bagas, however, said world CPO oil price might decrease in 2007.

World CPO production in January-December 2007 would likely increase by only 2 million tons to 38.97 million tons while its consumption would only be recorded at 39 million tons.

Bagas said domestic stable market and a proposed cooperation between PT PN and state oil and gas company PT Pertamina to produce CPO-based fuel oil may increase local CPO price this year.(*)
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