- Last week, CPO prices followed the downward trend of soybean and soybean oil prices.

-  Additionally, an Indonesian plantation company has been ordered to pay fines for illegally clearing peatland in a historic ruling.

-  Finally, Indonesia’s palm oil shipments to Pakistan are surging following the signing of a preferential tariff agreement in 2012.

-  CPO price tumbled 3.5% from RM2,590/tonne last Monday to RM2,499/tonne on Friday. This followed a 2.3% decline in soybean prices in the past two weeks underpinned by concerns that there will be a glut in US and South America.

-  An Indonesian court has ordered Kallista Alam to pay US$30mil (RM99.4mil) for illegal burning on 1,000ha of peatland in Acheh.

-  News reports said that in a civil case brought by the Ministry of Environment, the court ordered the company to pay 114.3bil Rupiah (RM31.0mil) in losses to the state and 252bil Rupiah (RM68.4mil) to rehabilitate the land it destroyed.

-  According to the same report, several other civil and criminal cases over the same forest have been filed following the Kallista Alam case.

-  A report by Vietnam News Agency said that Indonesia recorded a 55% increase in palm oil exports to Pakistan by October 2013 after the signing of the trade agreement.

-  Due to the trade agreement, Indonesia’s palm oil can now enter Pakistan without any import tariff.

-  This places Indonesia on the same playing field as Malaysia. Previously, Indonesia’s palm oil was taxed at US$110-120/tonne.

-  Malaysia’s palm oil exports to Pakistan rose 14.9% from January to November 2013 versus the same period in 2012.

-  In 2012, Malaysia’s palm oil shipments to Pakistan fell by 26.2% YoY partly due to the impact of Indonesia’s trade agreement with Pakistan.

-  Pakistan accounted for 8.2% of Malaysia’s palm oil exports in the first eleven months of 2013.

Source: Amesecurities