Palm Oil 02 (Jun 14 - Dec 24)

[winston]

Palm planters hit by weak demand

Despite the second quarter being a seasonally higher productivity quarter as witnessed by a 6.1% quarter-on-quarter (q-o-q) increase in Malaysia’s CPO production, HLIB Research said three out of six planters under its coverage clocked in lower FFB output in 2Q23.

Source: The Star

https://www.thestar.com.my/business/bus ... eak-demand

[winston]

Plantation – Malaysia

Short-term Bearish, But Supported By Indonesia’s Lower-than-expected Supply

Aug 23 palm oil inventory came in higher than market estimate mainly due to lower than-expected exports and domestic consumption.

We expect inventory level to increase marginally, driven largely by higher production, while exports remain sluggish.

Having said that, we reckon that Indonesia’s lower-than-market-expectation supply would support the pricing.

Maintain OVERWEIGHT, accumulate on weakness with the upcoming strong earnings.

Source: UOBKH

https://research.uobkayhian.com/content ... ecec6d5f55

[winston]

HLIB keeps CPO forecast at RM4,000 for 2023, top pick is IOI Corp

By Surin Murugiah

It expects the arrival of El Nino, and potentially stronger near-term demand — arising from India’s more active restocking activities ahead of the Diwali festival in mid-November, and palm’s improved price competitiveness against fossil fuel — to lend support to CPO prices.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/682154

[winston]

Stockpile jumped on weak exports
Production hit 10-month high

August stockpile of 2.12mt hit a 7-month high on seasonal output recovery and weak exports.

We maintain our 2023 CPO ASP forecast of MYR3,700/t as CPO price needs to stay competitive in the short term to help stimulate demand amid anticipated strong output recovery in 2H23.

We maintain our NEUTRAL call on the sector.

Preferred BUYs are FR, BAL, SOP, & TAH.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/339747.pdf

[winston]

Palm oil is lagging gasoil price - Regional Plantation Companies

Recent rally on gasoil price to >US$100 per bbl should bode well for palm oil

Meanwhile, soybean oil price is still trading at > US$500 per MT premium to CPO

Drought season will keep supply in check while demand set to recover on CPO restocking trend

Maintain BUY on Wilmar (WIL), First Resources (FR), Bumitama (BAL), and Lonsum (LSIP)

Source: DBS

https://www.dbs.com/insightsdirect/scre ... rtid=40580

[winston]

Anwar: China to double imports of Malaysian palm oil

NANNING (Sept 17): China’s imports of Malaysian palm oil will double to 500,000 tonnes a year, from the current 250,000 tonnes, following the exchange of a memorandum of understanding (MOU) between Sime Darby Oils International Ltd (Sime Darby Oils) and GuangXi Beibu Gulf International Port Group (GuangXi Beibu Gulf).

Malaysia's Prime Minister Datuk Seri Anwar Ibrahim and several other ministers witnessed the MOU exchange on Sunday, in conjunction with his one-day working visit to Nanning, China.

He said the MOU will help protect the interest of oil palm smallholders and producers alike.

“This is a perpetual agreement with China, which is a huge achievement for the parties involved,” he said during his visit to the 20th China-Asean Expo (Caexpo) 2023.

The MOU would also see the joint development of a refined palm oil and fats distribution and trading centre in Qinzhou, China, by Sime Darby Oils and GuangXi Beibu Gulf, with exports estimated to be worth RM2.5 billion.

Source: Bernama

https://theedgemalaysia.com/node/682852

[winston]

Regional Plantations
Sept output hit 36-month high
Stockpile at 11-month high

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/343977.pdf

[winston]

Plantation – Malaysia
Supply Below Market Estimates But Still Supportive Of Prices

Sep 23 palm oil inventory came in lower than market forecasts, mainly due to CPO
production falling short of estimates and high domestic usage despite palm oil exports
coming in below estimates.

We expect Malaysia’s inventory to hover at 2.3m-2.4m tonnes until year-end.

Supply, although lower than estimates, would still support CPO prices.

Maintain OVERWEIGHT, accumulate on weakness with the upcoming strong earnings.

Source: UOBKH

https://research.uobkayhian.com/content ... bf50ec6ebc

[winston]

Plantation – Malaysia
Apr 24: Production Surprisingly High Despite Fewer Harvesting Days

Malaysia's palm oil production for April came in surprisingly high despite fewer harvesting days.

This resulted in a build-up of inventory as exports and domestic use were lower mom.

An earlier-than-expected inventory rebuilding could lead to the softening of CPO prices in the near term. However, the elevated prices remain supported by the recent recovery of soft oil prices and Indonesia’s weaker palm oil production in 2H24. Maintain OVERWEIGHT.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email