Palm Oil 02 (Jun 14 - Dec 24)

Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Wed Dec 06, 2017 8:15 pm

Rich valuations and unexciting earnings growth ahead for plantation sector

KUALA LUMPUR: UOB KayHian Research maintained its Underweight stance on the Malaysian plantation sector, on rich valuations and unexciting earnings growth, compared to peers listed in Singapore and Indonesia.

The research house said on Wednesday that the outlook for next year remained gloomy as CPO prices are expected to experience significant weakness.

This is as palm oil is likely be in oversupply in mid-2018.

“We advocate investors to Sell on strength on the back of the expected upcoming strong quarterly results and high CPO prices,” it said.

However, it has a Buy on Kim Loong Resources as it expects good results and dividend.

It has Sell calls on IJM Plantations, IOI Corp and TH Plantations.

The research house noted that the CPO price weakness since early-November 2017 was due to concerns of weaker demand from India, following the import duty hike and the pile-up of inventories.

It expects CPO prices to hover at between RM2,500 and RM2,700 per tonne in Q1’18 as the sector enters the weak production period.

Meanwhile, CPO prices are expected to decline from 2H18 on a significant increase in production, with prices trending lower to RM2,200 to RM2,400 per tonne from May 2018, it said.

Source: The Star

https://www.thestar.com.my/business/bus ... CMLm07c.99
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Sun Dec 31, 2017 8:51 am

Malaysian palm oil price sheds 20% in 2017

Palm oil prices have been trending downwards since November, after India raised import taxes on edible oils to their highest in more than a decade, cutting demand.

Demand is expected to improve in the coming weeks as key buyer China stocks up ahead of Lunar New Year celebrations.


Source: The Star

https://www.thestar.com.my/business/bus ... tTztFhH.99
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Sun Dec 31, 2017 9:07 am

Under EU attack, top palm oil producers rethink trade strategy

JAKARTA/KUALA LUMPUR (Reuters) - Facing a backlash in Europe over palm oil’s environmental toll, the world’s top producers are scrambling to find new markets and even striking unusual barter deals, such as exchanging Sukhoi jets for the edible oil.

The European Union is the second-largest palm oil export destination after India for both Malaysia and Indonesia, which dominate production in a global market worth at least $40 billion.

Palm oil is used in thousands of household products, from snack foods to soaps, as well as to make biodiesel.

Indonesia’s overall palm exports were worth $18 billion last year, with EU sales accounting for 16 percent. For Malaysia, the EU made up nearly 13 percent of exports.

France said in July it will reduce the use of palm in biofuels over concerns of “imported deforestation”.

The European parliament In April voted to phase out unsustainable palm oil by 2020.


Source: Reuters

https://www.reuters.com/article/us-indo ... SKCN1BN367
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Sun Jan 07, 2018 9:02 am

Demand for Malaysian palm oil seen to rise by 15% following export tax suspension

"We are going to see buying coming in from China ahead of the Lunar New Year. India will also restock in the first and second quarter of the year as they have low stock levels".

Malaysia usually calculates a reference price each month to determine the crude palm oil export duty rate, whereby a price above 2,250 ringgit ($563) incurs a tax.

Its last calculated reference price for January was 2,623.31 ringgit per tonne, effectively incurring a 5.5 percent tax rate.

The minister of plantation industries and commodities Mah Siew Keong told a press conference on Friday the tax suspension was aimed at boosting palm oil prices and reducing high stockpiles, adding that he expected stocks to continue to increase in 2018.

The price of palm oil tumbled nearly 20 percent in 2017.

The overall trend is that stocks are high, and we haven't seen production declining at a higher magnitude yet.



Source: The Star

https://www.thestar.com.my/business/bus ... uspension/
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Sat Jul 14, 2018 8:16 am

Headwinds aplenty for palm oil

CPO market besieged by rising stockpile, oversupply and weak exports

The price of CPO has fallen by about 14% year-to-date, and is currently trading at RM2,147 per tonne.

Challenges:-
1. Stronger Ringgit
2. Higher Minimum Wage
3. Western's Anti Palm Oil Campaigns
4. Taxes & Cess: 1/3 Profits
5.


Opportunities:-
1. Trade War
2. Subdued production
3. High crude oil price
4. Increase in India’s import duties


In Peninsular Malaysia, the efficient planters’ average COP is between RM1,400 and RM1,500 per tonne compared with less efficient or new planters in Sarawak, where the COP could be as high as RM1,800 to RM2,000 per tonne.


Source: The Star

https://www.thestar.com.my/business/bus ... -palm-oil/
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Sat Jul 14, 2018 8:16 am

Headwinds aplenty for palm oil

CPO market besieged by rising stockpile, oversupply and weak exports

The price of CPO has fallen by about 14% year-to-date, and is currently trading at RM2,147 per tonne.

Challenges:-
1. Stronger Ringgit
2. Higher Minimum Wage
3. Western's Anti Palm Oil Campaigns
4. Taxes & Cess: 1/3 Profits
5.


Opportunities:-
1. Trade War
2. Subdued production
3. High crude oil price
4. Increase in India’s import duties


In Peninsular Malaysia, the efficient planters’ average COP is between RM1,400 and RM1,500 per tonne compared with less efficient or new planters in Sarawak, where the COP could be as high as RM1,800 to RM2,000 per tonne.


Source: The Star

https://www.thestar.com.my/business/bus ... -palm-oil/
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Tue Aug 14, 2018 7:45 am

Malaysian palm oil price in sharpest drop in a month on trade war

KUALA LUMPUR: Malaysian palm oil futures registered its sharpest daily decline in a month on Monday evening, falling for a third straight day on weakness in soyoil on the Chicago Board of Trade.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 1.7 percent at 2,204 ringgit ($538.88) a tonne at the end of the trading day for its sharpest daily decline since July 13.

It had dropped earlier by as much as 1.9 percent to 2,200 ringgit, its lowest since Aug. 7.

The U.S. Department of Agriculture on Friday raised its outlook for domestic corn and soybean harvests by a more than expected amount because of good weather during key phases of
development.

The trader also said that palm oil could remain bearish in the medium term, citing rising production and end-stocks.

"August exports are also not going to be good, as buyers would wait for the zero percent crude palm oil export tax rate to begin in September," he added.

Malaysia lowered its export tax on crude palm oil for September to 0 percent, down from 4.5 percent in August, the Malaysian Palm Oil Board (MPOB) said on Monday, citing the national customs department.

The MPOB had reported on Friday that July end-stocks in Malaysia rose by 1.3 percent to 2.21 million tonnes in a second month of gains, while exports grew by 6.8 percent from June to 1.21 million tonnes.

Production in July rose 12.8 percent from the previous month to 1.5 million tonnes and is set to climb in line with the seasonal trend until its peak towards the last quarter of the year.

Source: Reuters

https://www.thestar.com.my/business/bus ... 1pjzWxu.99
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Tue Aug 14, 2018 9:16 am

Lower-than-expected July stockpile a slight relief

Malaysian palm oil stocks rose 1% mom to 2.22m tonnes at end-Jul 2018. This was 5-9% below our forecast and consensus projections.

The key surprises were higher-than-expected exports and domestic disappearance, which grew by 11% mom and 41% yoy.

This, coupled with Indonesia’s plan to the raise biodiesel mandate, provides short-term support for CPO prices.

We project palm oil stocks to rise 8% mom to 2.4m tonnes in Aug 2018F.

Maintain our Neutral rating on the sector and GENP as our top Malaysian pick.

Source: CIMB

https://brokingrfs.cimb.com/CMU_bZ-uoV_ ... Ix1Ow2.pdf
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Tue Sep 25, 2018 10:07 pm

ASEAN Plantation

Synopsis

The plantation sector has underperformed for the last two years due largely to the subdued palm oil price outlook.

Crude palm oil (CPO) price performance has disappointed the market for the last two years despite the supply disruption post by the severe El Nino in 2015.

During this presentation, we will point out the major factors behind the subdued CPO price performance and discuss why plantation stocks are not performing as well as they used to in the wake of past El Nino events.

We will also highlight why we are less bearish now and what catalysts to watch for potential sector rerating.

Under our coverage, we like Wilmar International (WIL SP/BUY/Target: S$3.90), Bumitama Agri (BAL SP/BUY/Target: S$0.93), Tunas Baru Lampung (TBLA ID/BUY/Target: Rp1.700) and Kim Loong Resources (KIML MY/BUY/Target: RM1.50).

Source: UOBKH
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Re: Palm Oil 02 (Jun 14 - Dec 18)

Postby winston » Fri Sep 28, 2018 8:17 am

Malaysian palm oil price falls on rising stocks, technical selling

Palm stocks tend to peak towards the end of the calendar year and then decline due to a seasonal drop in production.

Crude palm oil prices are forecast to trend at $590 per tonne including cost, freight and insurance (CIF Rotterdam) by the end of the year on the back of firm demand from the biodiesel sector.



Source: The Star

https://www.thestar.com.my/business/bus ... fFVTuLK.99
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