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MooFassa
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Posting #51: Tue Aug 26th, 2008 16:23 |
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DJ Palm Oil Rally Gives CBOT Soyoil A Boost, But Gains Limited
CHICAGO (Dow Jones)--Vegetable oil prices rallied in the past week, with palm oil futures at the Bursa Malaysia Derivatives rising on bargain hunting.
That helped to drag up Chicago Board of Trade soyoil markets, with palm oil taking the leadership role for a change. In the week to Monday, November crude palm oil gained 4.63%, to MYR2,600 a metric ton, while December soyoil rose 3.6% to settle at 55.25 cents per pound.
"Palm's been pressured and it got itself too cheap," said Dan Cekander, director of grain research at Newedge USA.
And so, even as palm oil touched a year low in last week's trade, the net gains indicate bottom feeding. But in Tuesday trading, palm oil gave up its gains as it still struggles to find fundamental traction to sustain an upward swing.
Predictions of increased biodiesel demand because of high crude oil prices led to a boom in palm oil and soyoil production -- both of which are feedstocks for biodiesel. But the use of vegoils in biodiesel production retracted after prices rose too high during a commodities-wide rally.
"The big driver in palm was all the biodiesel production capacity that came on, but largely went unused," Cekander said. "That contributed to an increase in stocks, at a time when China's imports of palm oil slowed."
That caused prices to retrace from their highs and even though prices have rebounded, it will likely keep a cap on further price gains.
"There's record stocks of palm oil and production's up," said Sid Love, president of Kropf & Love Consulting. "We're not running out of soybean oil either."
But if problems with the 2008 U.S. soybean harvest arise, the soyoil market will receive added strength, he said.
Palm oil may continue to gain domestic market share against soyoil among consumers that are moving away from transfat, but the gains aren't completely "completely price driven," Cekander said, noting he watches each of the palm and soyoils more on the basis of their own fundamentals, not so much in a predictable spread.
Soyoil trades at a premium to palm oil -- although with the recent rally in palm oil that gap is narrowing. Influential vegoil analyst Dorab Mistry said Monday soyoil prices are unsustainable at their current premium to palm oil, at a conference organized by the Malaysian Palm Oil Council.
Mistry also said while the vegoil markets have seen a strong price correction, it might not have been enough to increase demand to eat through large stocks.
If crude oil prices stabilize within a 10-percentage-point range around $100 a barrel, crude palm oil could hold around MYR2,200, expecting near-term demand to pick up, Mistry said.
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MooFassa
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Posting #52: Mon Sep 1st, 2008 06:36 |
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Oil palm planters enjoy big drop in fertiliser bill
By Ooi Tee Ching Published: 2008/09/01
From today, the tax exemption on fertilisers, which account for about 60 per cent of oil palm planters' production cost, will take effect
OIL palm planters can expect their fertiliser bill to fall from today, following the government's decision to abolish import duty on the product.
The tax exemption on fertilisers takes effect from September 1 2008, Plantation Industries and Commodities Minister Datuk Peter Chin said.
Last year, Malaysia's import bill of 3.4 million tonnes of mineral fertilisers totalled RM2.6 billion, the bulk of it paid by oil palm planters.
Fertiliser cost accounts for about 60 per cent of oil palm planters' production cost.
"Budget 2009 seeks to ease farmers' burden and that includes oil palm planters," he told Business Times in a telephone interview yesterday.
Oil palm planters have had to contend with a sudden spike in fertiliser costs in the last 12 months because of higher crude oil prices.
The price of nitrogen-based fertiliser is normally benchmarked against natural gas prices as gas is used to make fertiliser. The price of gas in turn, follows the price of oil.
On the RM50 million allocation to his ministry under Budget 2009, Chin said it is meant to help oil palm planters implement conservation programmes.
"This allocation is not just limited to big companies pursuing the RSPO (Roundtable on Sustainable Palm Oil) certification.
"It is for all oil palm planters, whether smallholders or estate owners, who are implementing conservation programmes and enhancing biodiversity at their oil palm plantations in Malaysia," he said.
The RSPO is a group of global parties promoting the growth and usage of sustainable palm oil. Its members including oil palm planters, supermarkets, fastfood operators, bankers, environmental activists and social groupings.
RSPO's sustainability criteria promotes a balanced development between people, planet and profits.
"This money can also be used to help plantation companies upgrade the school facilities at their estates," he added.
Chin said the detailed guidelines on eligibility will only be finalised with the Finance Ministry in October.
Separately, the Malaysian Palm Oil Council (MPOC) has set up a RM20 million revolving fund for wildlife conservation.
MPOC is now collaborating with state-mandated non-governmental organisation Borneo Conservation Trust to gauge the welfare of Sabah's orang utan population. The country's exchange holding company Bursa Malaysia Bhd is also supporting this cause.
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MooFassa
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Posting #53: Thu Sep 4th, 2008 09:27 |
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04-09-2008: EPF active net buyer of plantation stocks
by Fong Min Hun
KUALA LUMPUR: The Employees Provident Fund (EPF) has been making waves in the plantation sector forking out a net amount estimated at RM150 million to mop up shares in six Main Board plantation companies since the second week of August.
According to Bursa Malaysia's shareholding change announcements, EPF had been actively acquiring shares in Asiatic Development Bhd, IJM Plantations Bhd, IOI Corporation Bhd, Kuala Lumpur Kepong Bhd (KLK), Sime Darby Bhd and United Plantations Bhd since Aug 11.
Among the stocks, Sime Darby tops the list in terms of value while IOI was the highest in terms of volume acquired. The value of the shares acquired here is based on the closing prices of each of the respective stocks.
Since Aug 11, EPF had acquired 13.4 million shares in Sime Darby worth about RM88 million. As for IOI, the total amount of shares EPF had accumulated was 14 million shares worth an estimated RM64 million.
The other plantation counters EPF has accumulated are Asiatic (net acquisition of 2.9 million shares worth RM16 million), IJM Plantations (2.3 million shares worth over RM6 million), KLK (3.3 million shares worth about RM38.6 million) and United Plantations where it acquired 197,000 shares for about RM2.2 million.
While plantation companies were acclaimed as winners at the beginning of the year, their stock prices have since fallen considerably after crude palm oil (CPO) prices fell alongside the easing of oil prices at the end of June. The price of CPO reached lofty heights of RM4,330 per tonne in March, but traded in August at about RM2,530 per tonne.
The drop in price - or price correction as some analysts have described it - raised largely bearish sentiments in the CPO market, but EPF's venture into the market may be a smart piece of business strategy for the provident fund.
"They're simply taking a longer- term view," said a plantation research analyst. "Most people would agree that the price of CPO is not going to collapse and oil prices are going to stay high.
"In the short term, the market may be volatile, but those who are taking the long-term view see the current situation as an opportunity to buy. It's a call on the price of oil."
The analyst said the market was very volatile at the moment given the current political and global economic situation, but if an investor could ride out the volatility over the next five years, then they would see the rewards of their investments.
EPF, with funds in excess of RM300 billion, certainly has the financial clout to weather the volatility over the next few years, said the analyst, but short-term investors would understandably shy away from plantation equities given recent changes.
"The biggest change is that the price of oil has come off from the US$145 (RM500.25) mark, which caused the drop in CPO prices. Also, the CPO supply from Indonesia has increased, adding further pressure to the price," the analyst added.
The analyst also believed that the price of CPO had bottomed out and did not expect it to drop any further. Any change to the government's windfall tax would also be negligible, the analyst added.
Four of the plantation stocks closed lower yesterday while two were unchanged. Sime Darby fell five sen to RM6.60, IOI Corp was down two sen to RM4.96, Asiatic fell 15 sen to RM5.35, while IJM Plantations closed three sen lower at RM2.40. KLK and United Plantations were unchanged at RM11.40 and RM11.80, respectively.
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delta
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Posting #54: Thu Sep 4th, 2008 17:26 |
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EPF fund performance in equity is limited by its sheer large size of capital and
their dividend return to contributors are decreasing from the highest of around
8% to lowest of about 4%. The article about EPF investment in plantaion is another good example of rumour news based on unnamed sources such plantation research analyst, most people agree, the analyst................. etc etc etc.
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Moolah
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Posting #55: Fri Sep 5th, 2008 01:22 |
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delta wrote: EPF fund performance in equity is limited by its sheer large size of capital and
their dividend return to contributors are decreasing from the highest of around
8% to lowest of about 4%. The article about EPF investment in plantaion is another good example of rumour news based on unnamed sources such plantation research analyst, most people agree, the analyst................. etc etc etc.
Good point anout the unnamed sources.
If the analyst is of some quality and has good reputation then the said so-called analyst should never be afraid to be named.
For example..
"They're simply taking a longer- term view," said a plantation research analyst. "Most people would agree that the price of CPO is not going to collapse and oil prices are going to stay high.
"In the short term, the market may be volatile, but those who are taking the long-term view see the current situation as an opportunity to buy. It's a call on the price of oil."
The analyst said the market was very volatile at the moment given the current political and global economic situation, but if an investor could ride out the volatility over the next five years, then they would see the rewards of their investments.
So who is this said plantation research analyst?
Can give so-much opinions and views BUT why is the analyst afraid of being named?
Why?
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Moolah
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Posting #56: Fri Sep 5th, 2008 01:49 |
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delta wrote: EPF fund performance in equity is limited by its sheer large size of capital and
their dividend return to contributors are decreasing from the highest of around 8% to lowest of about 4%.
Btw.. off topic a bit.
regarding EPF. I would perhaps give them slight leeway here. The sheer large size of their capital is indeed an handicap to its ability to generate a much higher dividend return to its members. And it has to be said that the past few years, the dividend returns have been improving each year.
As it is... if not mistaken... the dividend rate is more than 5%.. which is pretty decent given the sheer large size of capital.
that's my flawed one sen view on EPF dividend return. (Yes, I do hope for more.. but must be realistic a bit hor.)
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MooFassa
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Posting #57: Wed Sep 10th, 2008 06:31 |
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Wednesday September 10, 2008
Plantation stocks dive
By HANIM ADNAN
PETALING JAYA: Plantation stocks took a beating on Bursa Malaysia yesterday as crude palm oil (CPO) price extended its decline to trade below RM2,400 per tonne amid lower crude oil prices.
Heading the top losers’ list was Kuala Lumpur Kepong Bhd, which fell 60 sen to RM10.50. Kulim (M) Bhd lost 25 sen to RM7.05 and Kulim-WB dropped 19 sen to RM4.96.
Heavyweight IOI Corp Bhd was down six sen at RM4.80 and Sime Darby Bhd declined 20 sen to RM6.25.
OSK Research in its latest note had downgraded the plantation sector to “neutral” from “overweight” previously. It also downgraded its “buy” call on plantation stocks to “trading buy” across the board.
“Although CPO price is on a cyclical downtrend, we maintain that investors with a long-term investment horizon of three to five years should accumulate on price weakness as we believe the secular uptrend remains intact,” it said.
Investors with one year investment horizon should accumulate in mid-2009 during which many companies’ earnings visibility will improve given the long-term uptrend in China’s edible oil consumption.
OSK Research said: “We have not downgraded any individual stock calls to ‘neutral’ or ‘sell’ as the prices are grossly oversold and can stage a counter-trend rally.”
A trader said the global vegetable oil market was bearish over the past two months.
“No one is expecting a rally as there are no clear bullish factors in the near term,” he said.
CPO futures for November delivery is currently trading at RM2,378 per tonne, almost 50% below its record price of RM4,486 in March. Soyoil price is trading about a third below its all-time high in March.
Market analysts also expected CPO price to hit RM2,100 to RM2,200 per tonne by year-end.
On the cash market, the discount between CPO and soyoil widened to a record US$500 per tonne from only US$100 previously.
“While the CPO sharp discount to soyoil may prop up export figures, the market is saddled with rising palm oil production and burgeoning inventory,” a trader said.
Traders are expecting palm oil stockpiles for end-August to rise by 1.2% and production to increase significantly for the rest of the year.
The Malaysian Palm Oil Board is expected to release its August palm oil data today.
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MooFassa
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Posting #58: Thu Sep 11th, 2008 02:00 |
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CPO may ease further on higher output, weak demand
Published: 2008/09/11
SINGAPORE: Malaysian crude palm oil (CPO) futures are likely to ease another 6.5 per cent to around RM2,200 per tonne as surging production and weak demand weigh on the market, industry analyst Dorab Mistry said yesterday.
Palm oil output in Indonesia, the world's biggest producer, is likely to jump to a record high of 20 million tonnes in 2008, an increase of more than 16 per cent from last year.
Malaysia's CPO output is expected to reach 18 million tonnes, compared with 15.8 million tonnes in 2007, Mistry told an industry conference here.
"The high cycle of palm production shows signs of continuing well into October and even as far as November," Mistry said. "I also believe that in the first half of November, the combined stocks of Malaysia and Indonesia will exceed a tank bursting figure of five million tonnes." Mistry - a director with India's commodities-to-appliances company Godrej International - said his forecast on palm oil prices was based on crude oil at around US$100 (RM346) a barrel.
"My first price point for a market clearing level for CPO is a price of US$600-US$650 (RM2,076-RM2,249) FOB Malaysia which would equate to BMD futures at about RM2,200." "I must caution that if Nymex WTI crude oil falls further, to say US$80 (RM277) per barrel, that level of US$600-US$650 will need to fall further."
On Tuesday, James Fry, another leading industry analyst, said the price of Malaysian CPO would hover around US$700 (RM2,422) per tonne during the next six months and would find support around RM2,300 because of biofuels demand.
The benchmark November CPO contract on the Bursa Malaysia Derivatives Exchange ended down RM115, or 4.66 per cent, at RM2,354 a tonne after trading as low as RM2,346 a tonne, a level not seen since August 21 2007.
It has fallen nearly 50 per cent from its March peak of RM4,486 due to concerns about a build-up of supplies and news of defaults from buyers in India and China.
Mistry said a decline in palm oil prices could propel the ailing biodiesel industry.
"Palm has within itself the means to increase its biofuel market share so much that the surplus and the stocks can be cleared out without difficulty," he said.
Mistry said surging prices had cut vegetable oil demand from the food and the fuel sectors in the first half of this year.
"For the oil year 2007/08, we have lost one million tonnes of food demand and about 500,000 tonnes of biodiesel demand as a result of high prices." - Reuters
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InvestorGila
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Posting #59: Thu Sep 11th, 2008 06:35 |
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| some comments from Aseambankers Attachment: Plantation_Closer%20to%20a%20turning%20point%202008-09-11%20Aseam%20EF.pdf (Downloaded 4 times)
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InvestorGila
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Posting #60: Thu Sep 11th, 2008 06:36 |
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| some comments from OSK Attachment: Plantation%20sector_MPOB%20Aug%2008%20stats.pdf (Downloaded 4 times)
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