https://opiej.mpob.gov.my Oil Palm Industry Economic Journal Tue, 11 Mar 2025 05:23:19 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 https://opiej.mpob.gov.my/palm-oil-price-review-and-outlook-2024/ Mon, 11 Nov 2024 04:18:00 +0000 https://opiej.mpob.gov.my/?p=2378 Read more]]> This article reviews the palm price movement in the first four months of this year and presents a price outlook for the rest of the year. This article identifies and explores the underlying price drivers of CPO futures and cash prices by exploring related palm fundamentals and relevant external variables. Crude palm oil (CPO) futures on Bursa Malaysia have been on a rising trajectory since the start of this year rallying from RM3661 (USD774)/t in January, accelerating to a peak of RM4407 (USD932)/t at the beginning of April, or up RM746 (USD158) or 20% in the three months. Prices took a turn after testing the high of RM4407 (USD932)/t, decelerating rapidly to RM3818 (USD808)/t towards the end of April or down by RM492 (USD104) or 11% in the space of four weeks. Overall year-to-date ending 30 April active month CPO futures averaged RM3989 (USD844)/t or just RM76 (USD16) or 2% higher than the same period last year reflecting a steady to marginal increase in prices compared to last year. This article will address the main factors in understanding the dynamics of CPO futures pricing behaviour by discussing the main fundamental price drivers for the rest of the remaining part of this year.

]]> https://opiej.mpob.gov.my/improving-the-price-forecast-of-crude-palm-oil-futures-using-historical-return-variances/ Tue, 28 Aug 2018 04:35:57 +0000 https://opiej.mpob.gov.my/?p=172 Read more]]> This paper attempts to investigate the price relationship between the spot and futures prices of crude palm oil contracts traded in the Malaysian Derivatives Exchange. Using historical variances of spot and futures price returns, we applied a model for approximating the convenience yield developed by Longstaff (1995). This model was then tested on the actual crude palm oil prices for the spot-month and three month contracts from January 1988 to December 2002, to determine the forecasting accuracy of this model relative to the simple cost-of carry model. There was some improvement in the predictive ability of this approach which could be attributed to the inclusion of historical return variances. The improvement was also evident when tested against out-of-sample data, suggesting that the inclusion of historical return variances in the form of the convenience yield could provide a better forecast of crude palm oil futures prices.

]]>