Palm Oil 02 (Jun 14 - Dec 24)

Palm Oil 02 (Jun 14 - Dec 24)

Postby winston » Thu Jun 05, 2014 5:51 pm

June 4, 2014

MIDF remains positive on CPO prices

PETALING JAYA: MIDF Research released a report on Wednesday maintaining a positive call for crude palm oil (CPO) prices at an average RM2,700 per tonne this year despite recent price weakness.

CPO price for August delivery fell to RM2,395 per tonne yesterday on lower market sentiments after local inventories likely breached 2 million tonnes by year-end. CPO third-month futures reached a high of RM2,901 per tonne on March 10 but fell nearly 18% to RM2,387 on June 3.

The research house said the chances of El Nino developing this year “is at least 70%” and could very possibly be established by this August based on an update by the Australian Bureau of Meteorology.

It said for El Nino to develop this year, any three of four criteria have to be satisfied: sea-surface temperature, winds, Southern Oscillation Index and change in climate conditions.

MIDF Research expects a rebound in the second-half of the year underpinned by an increase in purchases from India, China and Pakistan due to the upcoming festive season, the current healthy local inventory level (at 1.77 million tonnes in April 2014) and impending El-Niño in second half of this year to exert upward pressure on CPO prices in anticipation of lower production in 2015.

Source: The Star
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Re: Palm Oil

Postby winston » Mon Jun 16, 2014 8:53 am

Indonesia's biodiesel progress

Indonesia's biodiesel consumption for 5M14 of 514,935kl was behind our forecast of 2m kl and the government's target of 3.96m kl for 2014. The minister cited poor infrastructure as one of the key challenges in meeting the target. It now expects volume of subsidised biodiesel blend to be 1.32m kl but did not provide forecast for others.

Based on this, we estimate Indonesia may only consume 1.5m kl of biodiesel in 2014, which is 25% behind our forecast. This is negative for CPO prices but could be offset by lower supply due to drier weather in parts of Indonesia.

We remain optimistic on medium-term prospects of Indonesia's biodiesel usage as we see progress being made to improve the logistical issue.

We keep our average CPO price forecast of RM2,700 per tonne for 2014, Neutral rating and key picks (AALI, First Resources, SIMP and Ta Ann Holdings).

Source: CIMB
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Re: Palm Oil

Postby winston » Wed Jul 09, 2014 6:17 pm

Regional Plantation

We remain convinced that palm oil production growth will likely be weak this year, driving prices higher.

We see fresh evidence of this, which we believe could potentially interrupt the inventory upcycle.

Our sector Top Pick remains Bumitama Agri (BAL SP, BUY, FV: SGD1.66), although we continue to like First Resources (FR SP, BUY, FV: SGD2.86), Astra Agro Lestari (AALI IJ, BUY, FV: IDR34,375) and Genting Plantations (GENP MK, BUY, FV: MYR13.25).

Source: DMG
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Re: Palm Oil

Postby winston » Wed Jul 09, 2014 6:21 pm

Plantations - Valuation is root cause of position trimming

Our 2-day marketing trip in Taiwan revealed that interest in the palm oil sector remains strong.

However, since our mid-Dec 13 trip, some investors may have lightened their positions on valuation grounds. They appear keen to reinvest in the sector when valuations are more attractive due to their positive long-term view on CPO price.

This is broadly in line with our Neutral call on the sector.

We continue to prefer Singapore and Indonesia-listed planters which offer better value like First Resources, AALI, Ta Ann, SIMP and Samp Agro.

Source: CIMB
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Re: Palm Oil 01 (May 08 - Jul 14)

Postby winston » Mon Aug 18, 2014 6:43 pm

The 30% foreign limit proposal

Indonesia's lawmakers plan to restrict foreign ownership in plantations to a maximum 30%, from the current 95%, a Reuters news agency report says.
However, it is uncertain if this ruling will be retrospective, and the plantation bill will be passed.

Malaysian planters would be the most affected by any change as they currently have large holdings in Indonesian estates. This uncertainty, coupled with the 100k ha limitation rules, may lead to slower new plantings in Indonesia, and negatively impact future supply growth from the country.

This may also spur affected firms to venture into other regions like Africa or PNG, or expand downstream.

We maintain our Neutral sector rating, while our key picks remain First Resources, Astra Agro and Ta Ann.

Source: CIMB
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Re: Palm Oil 01 (May 08 - Jul 14)

Postby winston » Thu Sep 04, 2014 5:46 pm

Plantations - Preview of Aug palm oil stocks

A survey conducted by our futures team revealed that palm oil production in Malaysia was still strong in Aug, rising by an estimated 13.7% mom and 9% yoy to 1.89m tonnes.

Palm oil exports were weak, declining by around 5% mom due to stiff competition from other edible oils and weaker demand from China.

Overall, we estimate that Malaysian palm oil inventory rose 16% mom to 1.96m tonnes in Aug.

The higher inventory is likely to keep palm oil prices range-bound at RM1,900-2,200 per tonne.

We maintain our Neutral rating on the sector and prefer stocks like First Resources that offer strong output growth to offset weaker CPO prices.

Source: CIMB
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Re: Palm Oil 01 (May 08 - Jul 14)

Postby winston » Fri Sep 05, 2014 5:56 am

Govt exempts exporters of CPO from paying export duty from Sept 1

KUALA LUMPUR: Exporters of crude palm oil (CPO) have been exempted from paying any export duty efffective from Sept 1, said Plantation Industries and Commodities minister Datuk Amar Douglas Uggah Embas.

http://www.thestar.com.my/Business/Busi ... om-Sept-1/
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Re: Palm Oil 01 (May 08 - Sep 14)

Postby winston » Mon Oct 20, 2014 5:30 pm

Regional Plantation- Sep 14:

Inventory up marginally on high palm oil imports despite better exports growth and slowdown in production.

Maintain MARKET WEIGHT as we think that most of the plantation companies are fairly valued now.

CPO price is likely to continue remaining under pressure due to the anticipated bumper US soybean crop and weaker-than-expected biodiesel demand growth from Indonesia.

Support is likely to come sometime in 4Q14 as production might miss expectation.

Our top pick is First Resource

Source: UOBKH
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Re: Palm Oil 01 (May 08 - Sep 14)

Postby winston » Sat Oct 25, 2014 11:00 am

Pick-up in CPO prices expected in 2015

http://www.thestar.com.my/Business/Busi ... ?style=biz
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Re: Palm Oil 02 (Jun 14 - Dec 15)

Postby winston » Sun Oct 26, 2014 6:13 am

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