Indonesia and Malaysia have been discussing joint efforts to strengthen the prices of commodities, especially palm oil and rubber, through market stock management and by lowering supplies under a plant rejuvenation program, Asia Pulse reports.
At a bilateral meeting between Indonesia's agriculture minister and Malaysia's plantation and commodity minister in Kuala Lumpur on Wednesday, both agreed to replace palm oil plants older than 25 years and to carry out a bio-fuel program to boost demand for CPO-Malaysia is already mixing five per cent of CPO or methyl ester with fossil fuel oil starting this month.
Efforts have been made by the relevant industries to produce CPO following the roundtable on sustainable palm oil (RSPO). Right now, one Indonesian and four Malaysian CPO companies are holders of RSPO certificates.
Separately, Indonesia’s government will be forced to dig deeper into its pockets for fuel subsidy allocations after a House of Representatives' commission agreed to give state oil and gas firm PT Pertamina greater cuts for distributing subsidized fuels, the Jakarta Post reports. With a higher distribution cost, the overall fuel subsidy will stand at more than Rp 32 trillion (around USD2.6 billion) as initially predicted, although the exact figure is still the subject of further discussions, said Energy and Mineral Resources Ministry's director general for oil.
The new system will adopt a fixed payment for Pertamina while previously it was calculated as a percentage of a mean of the daily oil price traded in Singapore.
According to traders, Malaysian palm futures gave up a nearly 2 percent gain to finish marginally lower on Thursday, as selling was sparked by falls in rival soybean prices, Reuters reports.
The market rallied early on expectations that Malaysian palm stocks at the end of this month may drop by around 5 percent from January on falling output and slightly better than expected exports, said a trader at a Kuala Lumpur-based brokerage.