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Today's FFB price: how the MPOB number becomes what your dealer pays
The number on the news isn't what you get paid. Here's the arithmetic in between, and where each ringgit goes.
Two different prices
Two different numbers show up depending on where you look. The CPO reference price is a mill-and-refiner number, in ringgit per tonne of refined crude palm oil, published daily. The FFB price is what a dealer or mill pays you, in ringgit per tonne of raw, unprocessed bunches, at the weighbridge. They move together — but they are never the same figure, because a tonne of fruit is not a tonne of oil.
A mill turns fruit into oil at its oil extraction rate (OER) — the share of a tonne of FFB that comes out the other end as crude palm oil. Malaysia's national average OER has sat close to 20% in recent years (19.70% in 2022, 19.86% in 2023, per MPOB's published extraction-rate data). So a rough estimate of what a tonne of your fruit is worth in oil alone is:
FFB value ≈ CPO price × OER
A CPO price of RM 4,000/tonne at a 20% OER implies an oil value near RM 800/tonne of fruit — before palm kernel is even added in.
Real mill formulas go further: they add a palm kernel component (the fruit's seed has its own oil and cake value), then subtract transport, handling and the dealer's margin. That's why the number you're actually quoted always sits under this estimate — and further under it again the smaller your load and the further you are from the mill.
A worked example
| CPO price | at 18% OER | at 20% OER | at 22% OER |
|---|
| RM 3,500 /t | RM 630 | RM 700 | RM 770 |
| RM 4,000 /t | RM 720 | RM 800 | RM 880 |
| RM 4,500 /t | RM 810 | RM 900 | RM 990 |
OER swings with fruit quality and season — better bunches and drier weeks push it up, a wet month or a run of unripe loads pulls it down. It's an industry-wide average, not something any one smallholder controls day to day, which is exactly why the gap between this estimate and your dealer's actual number is worth watching over time rather than any single day.
Check today's gap
Frequently asked
Why does my dealer pay less than the CPO price times OER?
Because that arithmetic only covers the oil. Real formulas add palm kernel value and then subtract the dealer's transport, handling and margin — each of those legitimately eats into the number before it reaches you.
Does a higher OER mean a higher price for me specifically?
Only indirectly. OER is a mill-wide average across everyone's fruit that day; your own ripe, well-graded bunches help that average, but the price you're quoted is usually set before your particular load is weighed and graded.
Where does the daily price actually come from?
MPOB's economics division (BEPI) publishes the official monthly and reference prices; MPOC's daily market wrap is the other common source for a same-day figure, and it's the one SawitSync's Market tab pulls every morning.
Stop doing this arithmetic in your head
SawitSync's Market tab shows today's CPO reference price automatically, so you always know the number your dealer's offer should be measured against.
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Extraction-rate figures: MPOB, Oil Extraction Rate of Crude Palm Oil 2023.