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El Nino disrupts production in major producing countries
THE prevailing tightness in the global supply of palm oil, the world&rsquo s most traded vegetable oil, is expected to continue this year.
Industry experts say production has slumped as the lagged effects of the El Nino dry weather last year severely disrupts yields in major producing countries - Malaysia, Indonesia and Thailand.
Malaysia&rsquo s palm oil stocks stood near a six-year low at 1.46 million tonnes in August this year while Indonesia stocks were at 1.7 million tonnes in July.
Leading industry expert Dorab Mistry of Godrej International had said in March that &ldquo this El Nino (2015) is doing what all big El Ninos do &ndash lowering production and boosting prices.&rdquo
Back in 1982-1983 and 1997-1998, Malaysia posted the largest drop in CPO production during the strong El Nino dry weather events.
Any rainfall deficit of 100 mm per year can translate into a reduction of between 10% and 20% in fresh fruit bunches (FFB) yields in the estates, say experts.
In Malaysia, the average rainfall varies between 1,600 mm and 2,400 mm per year.
The supply disruption by El Nino also saw CPO prices in 2009-2010 swinging into comfortable levels between RM2,500 and RM3,000 per tonne.
Oil World Ltd executive director Thomas Mielke says the world could soon be running out of palm oil this year.
&ldquo Global palm oil supplies would not be able to meet up with the export demand in 2016-2017,&rdquo he told a palm oil conference in India recently.
He points out that the global palm oil production from January to September this year could be lower-than-expected at an estimated 43.3 million tonnes while describing the production slump as &ldquo unprecedented and bullish.&rdquo
On the other hand, industry expert Dr James Fry of UK-based LMC International Ltd points out that global palm oil production will recover increasing by 4 million tonnes in the first half of next year from the same time in 2016.
Fry also forecasts a rise in global palm production in the second half of 2017 by over 2 million tonnes from the corresponding period this year.
For the last quarter of 2016, Fry estimates local inventories to climb to a range between 1.75 million and 1.8 million tonnes.
&ldquo CPO output will resume year-on-year growth, but we have the seasonal slowdown after November,&rdquo he said.
&ldquo Malaysian Palm Oil Board (MPOB) stocks will settle at 1.75-1.80 million tonnes in October-December, and will then fall back until they soar from Q2 onwards.&rdquo
Interestingly, production is recovering slowly but still nowhere near last year&rsquo s level, says Public Investment Bank in its report.
&ldquo We expect more production growth coming from Peninsular Malaysia in the coming months, overtaking the leading position from East Malaysia,&rdquo it adds.
Production has improved by 7.3% to 1.7 million tonnes in August with Peninsular Malaysia saw a strong catch-up, rising 10.8% compared with East Malaysia, up 4.1%.
In September, analysts expect local palm oil stocks to stay flat at 1.48 million tonnes.
Production this month will likely increase to 1.82 million tonnes, which is on track for a seasonal peak in October-November period, while exports are expected to trend downward to 1.61 million tonnes after restocking by China in August.
On Thursday, Reuters reported that leading industry analyst Dorab Mistry of Godrej International expects a sharper-than-estimated annual drop in output from Indonesia and Malaysia for 2015-2016 period.
For this year, Dorab sees Indonesia churning out 28.5 million tonnes of palm oil, lesser than a prior forecast of 31 million tonnes, and Malaysia producing 18.2 million tonnes.
However, while global palm oil output for 2015-2016 is seen declining by significantly more than the previous forecast of 2.5 million tonnes, a strong recovery next year should offset the deficit.
&ldquo Overall in oil year 2015-2016, palm oil production will decline by over six million tonnes, a decline which has never before been seen in history,&rdquo he says.
But production in the next calendar year could see a strong recovery of almost 6.5 million tonnes, adds Dorab.
&ldquo Let us not ignore the rapid expansion of palm oil production in Central and South America.&rdquo
In other vegetable oils, Mistry says he sees prices of soyoil, palm&rsquo s rival, falling to US$650 per tonne on a free-on-board basis if palm oil declines to RM2,200.
He adds that lauric oil prices are also due for a correction.
Foreign fund flow saw strong rebound last week &mdash MIDF Research
KUALA LUMPUR: Foreign investors returned to Bursa Malaysia last week with the strongest inflow in 10 weeks, when they bought RM733.4 million after offloading RM565.9 million in the week prior that had only a three-day trading week, according to MIDF Research.
In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said foreigners&rsquo participation rate, by volume, remained relatively strong last week at RM921.36 million, albeit at a slower pace than RM1.21 billion recorded in the week before.
He said they were net buyers in the last five trading days of the week after being net sellers everyday in the prior, due to a shorter trading week.
&ldquo They bought RM16.3 million on (last) Monday, RM34.7 million on (last) Tuesday, RM45.2 million on (last) Wednesday, RM49.6 million on (last) Thursday and RM31.9 million on (last) Friday.
&ldquo The increased buying on (last) Thursday was mainly due to the strong CPO (crude palm oil) price, which hit RM2,909 per tonne &mdash the highest in four years. That benefits listed plantation companies with upstream operations the most. Ringgit was also the strongest in the week on (last) Thursday, at USD/RM4.1095,&rdquo he said.
Last week&rsquo s buying led year-to-date cumulative net foreign inflow to its highest in 18 weeks at RM2.54 billion, compared with RM1.81 billion a week ago.
In 2014, foreigners offloaded RM6.9 billion, followed by another RM19.5 billion in 2015.
Meanwhile, Zulkifli said the local equity market was considerably vibrant last week as participation rate from both local funds and retailers improved to RM2.14 billion (from RM2.03 billion the week before) and RM624.6 million (from RM518.9 million the week before) respectively.
He also said local institutions turned net sellers during the week, offloading RM738.7 million.
&ldquo They sold for the latest five trading days after six days of net buying prior. On a weekly basis, they were net buyers for three successive weeks before last week. The selling by local funds last week was the heaviest since April,&rdquo he said.
Retailers, on the other hand, became net buyers two weeks in a row as they bought RM5.3 million last week and RM80.9 million in the week prior.
He said they bought RM1.56 billion last week, the highest in four weeks. On the flip side, the selling last week was the highest in five weeks at RM1.56 billion.
&ldquo Retailers were net buyers ahead of the Fed (US Federal Reserve) meeting and took profit on (last) Thursday and (last) Friday,&rdquo he added.
Globally, Zulkifli said equities rallied after the Fed decided to keep interest rates unchanged in September while the Bank of Japan expanded its monetary easing.
Stocks climbed last Wednesday and last Thursday as the Fed kept the Fed funds rate at 0.5%, but pared down some gains last Friday, while Brent crude oil dropped 3.7% last Friday, ending the week marginally higher by 0.26% to US$45.89 (RM189.52) per barrel, he noted.
so unwanted this fellow.
HuathuatLeo ( Date: 27-Sep-2016 17:03) Posted:
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this counter really really REALLLYYYY super REALLLY requires patience. lmao hahahahahaaa
halleluyah ( Date: 27-Sep-2016 16:55) Posted:
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shuld be good news for CPO producers cuz CPO prices will rise.
However, Indofood have other agribusiness segments like rubber, sugar cane etc.
Mati....lucky out last wk....
EUROPEAN VEGOILS-PALM OIL PRICES RISE AS INDIA CUTS IMPORT DUTY
LONDON: Palm oil prices in Europe were higher on Monday, boosted by a potential pick-up in demand from India following a cut in import duties and a rise in Malaysian futures to a five-month high.
Sellers of RBD palm olein raised offers by $2.50 to $10 per tonne, with January/March shipment last traded at $675.00, up $7.50 from Friday.
India said on Friday it would lower its import duty on crude palm oil and refined vegetable oils by five percentage points to 7.5 percent and 15 percent respectively as part of efforts to curb food price rises.
The news helped to trigger a rise in Malaysian palm oil futures to a five-month high on Monday.
EU rapeseed oil asking prices edged higher although buyers did not follow the market up and no trades were reported.
Dealers said a run-up in prices earlier this month had now largely stalled and buyers were waiting for more clarity about the market' s direction before stepping up purchases.
EU rapeoil for Nov/Jan delivery was offered at 756 euros a tonne with prices holding at little changed levels during the last few days but still around 20 euros up from mid-September.
CBOT soyoil prices were lower with the most active contract down 0.4 percent at 33.43 cents per lb at 1625 GMT. Coconut oil offers were also mostly higher while palmkernel asking prices were little changed.
I can take the job for less and make it a success. STI will definitely be more vibrant. Kill all the shorts. Economy wil rebound coz all huat kar seow from the market. The wealth will flow down to everyone. lmao hahaha. The people will be so happy, ask me to replace LHL. hahaha.
Qanghoo ( Date: 23-Sep-2016 10:13) Posted:
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Well, at least someone is probably thankful that it provides him with a 3-mil a year job.
HuathuatLeo ( Date: 23-Sep-2016 10:09) Posted:
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best to delist all counters from STI. This STI really cant make it. Curse it to die. lmao hahaha
Qanghoo ( Date: 23-Sep-2016 09:41) Posted:
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Palm oil price rises to 5-month high as analyst warns of global shortage
Qanghoo ( Date: 23-Sep-2016 09:31) Posted:
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Sorry, some problem to the link to the article. Cldn' t preview (SJ problem) Try clicking here instead.
Qanghoo ( Date: 23-Sep-2016 09:28) Posted:
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Yesterday CPO broke RM2700 (close 2725) on Bursa .....
Palm oil rises to 5-month high as analyst warns of global shortage
HuathuatLeo ( Date: 22-Sep-2016 15:02) Posted:
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the selling never ends for this fatty counter. ahahhaa
halleluyah ( Date: 22-Sep-2016 12:10) Posted:
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X' mas coming....palm oil px will b going higher....come makan some more....
lai lai cheong ah.. hahahah. so belly fat, please work harder.
Cpo price up a bit last night.
earlybird14 ( Date: 21-Sep-2016 16:56) Posted:
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lai lai hope it can cheong to $2. if and when the fat is removed... now still heavy. hahaha
earlybird14 ( Date: 21-Sep-2016 16:56) Posted:
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HuathuatLeo ( Date: 21-Sep-2016 16:36) Posted:
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this one is not babe..more like babi.. hahahaha too fat cannot move.
halleluyah ( Date: 21-Sep-2016 16:20) Posted:
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