InfoSAWIT, JAKARTA – Indonesia’s crude palm oil (CPO) market is expected to remain on a positive trajectory this week, supported by strong Malaysian export performance, a rebound in competing vegetable oils, and growing market attention toward the country’s upcoming B50 biodiesel program.

According to Andrial Saputra, Head of Exchange and Business Development at KPBN, palm oil fundamentals remain relatively robust despite ongoing volatility in global commodity markets.

“CPO prices are projected to maintain a positive trend this week. The contango structure still evident on the Bursa Malaysia Derivatives Exchange (MDEX) indicates that market conditions remain relatively healthy and stable,” Andrial told InfoSAWIT on Thursday.

Export Demand Remains a Key Driver

One of the strongest supporting factors comes from Malaysia’s export performance during the first half of the month.

Data from independent cargo surveyors Intertek Testing Services (ITS) and AmSpec showed export growth of 9.6% and 23.8%, respectively, compared to the same period in the previous month.

The figures suggest that global demand for palm oil remains resilient, particularly among major importing countries across Asia and other key consumption regions.

“Export growth continues to indicate solid international demand for palm oil, which is helping support overall market sentiment,” Andrial explained.

Soybean Oil Recovery Boosts Market Confidence

A second bullish factor stems from the recovery in soybean oil prices on both the Chicago Board of Trade (CBOT) and China’s Dalian Commodity Exchange.

After falling to multi-month lows, soybean oil futures have begun rebounding, providing additional support for palm oil due to the close relationship between the two markets.

“The technical rebound in soybean oil is creating a positive spillover effect for palm oil because the correlation between the two commodities remains strong,” he said.

B50 Biodiesel Program Adds Domestic Support

The third factor comes from Indonesia’s domestic market, where traders are increasingly focused on the planned implementation of the B50 biodiesel mandate scheduled to take effect on July 1.

Although the policy’s immediate impact is expected to be largely sentiment-driven, the prospect of higher palm oil consumption within Indonesia is helping strengthen market confidence.

The biodiesel program is viewed as a critical component of Indonesia’s strategy to increase renewable energy utilization while supporting domestic palm oil demand.

Limited Impact from Crude Oil Prices

Despite recent fluctuations in global energy markets, Andrial believes crude oil prices are currently playing a relatively minor role in determining palm oil direction.

He noted that improving geopolitical sentiment in the Middle East, including potential easing of tensions involving Iran and the United States, could pressure crude oil prices lower. However, such developments are unlikely to significantly alter palm oil’s near-term outlook.

“For now, crude oil has only a limited influence on CPO because the market is still being supported by strong demand fundamentals and biodiesel-related sentiment,” he said.

Technical Outlook Points Higher

From a technical perspective, Andrial expects KPBN CPO prices to test a resistance level of Rp15,625 per kilogram, which represents the highest level recorded in May.

A successful breakout could open the way toward the next target near Rp15,850 per kilogram, while support is seen around Rp15,225 per kilogram.

Market participants are expected to continue monitoring Malaysian export data, soybean oil performance on CBOT and Dalian, and developments surrounding Indonesia’s biodiesel program, all of which remain key drivers for short-term price movements. (T2)