Business Times

Thursday, 15 Oct, 2009

Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives were higher at close yesterday on expectation of better demand for rest of the year, dealers said.

They said that India was importing more palm oil to cover a shortage in its oilseeds supply following a recent drought.

“The Soybean Processors Association of India is forecasting a 10.1 per cent decline for India’s soybean production this year,” said one of the dealers.

According to the dealers, the near-term CPO trade range will be between RM2,100 and 2,300 per metric tonne before rising further in 2010.

At close, October 2009, November 2009 and January 2010 increased RM9 each to settle at RM2,209, RM2,184 and RM2,165 per tonne respectively while December 2009 went up RM3 to RM2,160 per tonne.

Turnover was lower at 17,549 lots compared to 26,723 lots on Tuesday while open interest rose to 91,299 contracts from 89,101 contracts previously.

On the physical market, current month October South increased to RM2,210 per tonne from RM2,190 per tonne on Tuesday.

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Bernama

Wednesday, 14 Oct, 2009

KUALA LUMPUR, Oct 13 (Bernama) — Demand is expected to remain robust for crude palm oil this year with India importing more palm oil to cover a shortage in its oilseeds supply following a recent drought.

“Already the Soybean Processors Association of India is forecasting a 10.1 per cent decline for India’s soybean 2009 production,” Kenanga Research said in its research note on Tuesday.

It added that the global consumption for vegetable oil would also improve as the world economy gains strength.

The research house said the near term crude palm oil (CPO) trade range will be between RM2,100 and 2,300 per metric tonne (PMT) before rising further in 2010 as supply concerns set in.

“While CPO output should improve over the next two months, we continue to believe that 2010 supply will remain sluggish with the impact of lower fertilizer usage and El-Nino weighing in.”

The research house also maintained a neutral view for the sector with unchanged 2009 and 2010 CPO price assumption of RM2,200 PMT and RM2,400 PMT respectively.

The research house favourite pick remained Kuala Lumpur Kepong (KLK) with a target price of RM15.00.

KLK share price meanwhile ended Monday at RM14.08. Read the rest of this entry »

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The Star

by Hanim Adnan

Wednesday, 14 Oct, 2009

IN three short years, the fledgling palm biodiesel industry in Malaysia is fast heading for a bust.

Many operators are now struggling as the steep price of crude palm oil (CPO) is cutting into their profit margins and leaving them with not enough cash to operate.

In fact, CPO prices at above RM2,000 per tonne are wiping out cash reserves just as the first batch of biodiesel is produced, especially by new market entrants.

While there are still no reported cases of biodiesel plant closures in Malaysia except for a drastic slowdown in production, casualties of the biofuel hype are fast on the rise on the overseas front.

Many biofuel producers in the United States, Germany and Australia have been filing or contemplating bankruptcy due to escalating feedstock costs on the back of the global economic crisis.

On top of the financial problems, many ethanol plants are only operating at 50% capacity and previously-announced plants are being stalled or stopped completely.

Given the not-so-rosy outlook overseas, is the reality hitting home for local biodiesel producers?

Of the total 91 approved biofuel licences approved by the Government, only 10 plants are in operation in Malaysia. Read the rest of this entry »

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Business Times

Wednesday, 14 Oct, 2009

Malaysian palm oil futures ended 0.5 per cent higher yesterday, easing from more than two-week highs hit earlier on profit-taking, although a crude oil rally and recovering exports kept sentiment up.

Prices of palm oil had been on the decline in the last two weeks but regained momentum after rumours of strong exports surfaced on Friday.

The benchmark December contract on the Bursa Malaysia Derivatives Exchange rose as much as RM31 to RM2,178 a tonne, a level unseen since Sept. 25, before settling up RM10 at RM2,157 by the close.

“Traders are letting the market ease before taking positions again but the strength in external markets and higher exports cannot be ignored,” said a trader with a local brokerage.

The market briefly hit the 200-day moving average at RM2,173, a long-term indicator that suggests fundamentals are turning bullish for investors, traders said.

Market participants took heart from cargo surveyor Intertek Testing Services reporting an 8.3 per cent jump in Malaysia’s Oct. 1-10 palm oil exports over the weekend, which they say could put pressure on stockpiles this month.

Another surveyor, Societe Generale de Surveillance, said exports for the same period rose 3.9 per cent to 345,393 tonnes.

Better exports and rising palm oil futures market saw Malaysia’s spot refined, bleached and deodorised (RBD) palm olein narrow its discount to rival Argentine soyoil by US$10 (US$1.00 = RM3.42) a tonne to US$94 from last week, traders said.

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Business Times

by Ooi Tee Ching

Tuesday, 13 Oct, 2009

MALAYSIA’S palm oil exports are expected to fetch about RM50 billion this year, its first annual drop in four years, as current prices at RM2,200 per tonne is only half of last year’s record high.

“It is likely to be lower than last year’s record high, but higher than in 2007, provided palm oil prices are sustained at current levels,” Malaysian Palm Oil Board (MPOB) chairman Datuk Sabri Ahmad said.

Last year, palm oil exports reached an all-time high of RM65.2 billion.

“The last time we saw a dip in exports was in 2005. Prices then were somewhat subdued compared to the previous year,” he told Business Times in a telephone interview yesterday.

While export value is likely to dip this year, it is important for Malaysia to gain global market share.

“Indeed, palm oil is a value-for-money food ingredient serving the mass global population. In terms of volume, we’ve shipped out 11.7 million tonnes, 5 per cent more than in the same nine months last year,” Sabri said.

Having just returned from a palm oil trade mission to the US, Sabri said there was still a lot of untapped market potential in the US.

“In California alone, there is a sizeable ethnic population to whom we can introduce blended cooking oils with added phytonutrients,” he said.

From January next year, restaurants in California are required by law to get rid of transfat from their menu. Palm oil can be blended with other vegetable oils to make transfat-free baking fats and deep-fry oils.

According to the latest update from the MPOB, Malaysia exported RM36.5 billion of palm oil in the first nine months of this year. The top five buyers were China, Pakistan, India, the US and Europe.

Malaysian Palm Oil Council chief executive Tan Sri Yusof Basiron, in a separate telephone interview, agreed with Sabri about the potential of the North American market.

“In a globalised market, palm oil is increasingly seen to complement soyabean. Journalists and analysts like to say palm oil is in direct competition with soya, but, in reality, food manufacturers prefer blended oils and fats,” he said.

Yusof explained that oils and fats were usually blended to meet the American Heart Association’s recommended dietary oil requirements to improve blood cholesterol ratio.

Essentially, the blended edible oil should contain an equal composite of saturated, mono-unsaturated and poly-unsaturated fatty acids.

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The Star

by Hanim Adnan

Tuesday, 13 Oct, 2009

PETALING JAYA: The Government’s B5 biodiesel programme has hit a speedbump given the poor take-up rate by its initial target group – diesel-powered government vehicles in the Klang Valley.

A source close to the industry told StarBiz that on average less than 40 tonnes a month had been taken up so far by the Defence Ministry, the Kuala Lumpur City Hall and Selangor’s Public Works Department – much to the dismay of biodiesel producers in the country.

“Given such poor response from the government sector, it is impossible to imagine the take-up when B5 biodiesel is made accessible to the industrial sector and the public by early next year,” the source said.

The Government has projected that 500,000 tonnes of biodiesel would be needed a year upon the full implementation of the B5 programme in 2010. B5 is a blend of 5% biodiesel and 95% fossil fuel diesel. Read the rest of this entry »

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The Star

by Eileen Hee

Tuesday, 13 Oct, 2009

Shipments for first 10 days of October up 4%

PETALING JAYA: Crude palm oil (CPO) prices posted gains yesterday mainly on bullish export data for the first 10 days of October.

The benchmark CPO futures contract for December on Bursa Derivatives Exchange closed RM62 higher at RM2,147 per tonne, ignoring the bearish performance of palm oil stocks and rising palm oil stockpiles in the country. Read the rest of this entry »

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Business Times

Tuesday, 13 Oct, 2009

Malaysian palm oil futures jumped 3.2 per cent to a two-week high yesterday as sentiment improved on strong export data and concern adverse weather could hit rival soyoil production.

The benchmark December contract on the Bursa Malaysia Derivative Exchange rose as much as RM67 to RM2,152 a tonne, a level unseen since September 25.

The contract then settled up RM62 ringgit at RM2,147. Trade volumes more than doubled to 21,479 lots of 25 tonnes each, signalling fresh buying.

The market had already priced in industry regulator Malaysian

Palm oil Board report yesterday that last month’s palm oil stocks reaching an eight-month high, thanks to a rise in output and slightly slower exports.

“Exports for the first 10 days of October are more exciting and there are prospects that vegetable oil production could be tight with the bad weather in the United States,” said a trader with a foreign brokerage. Read the rest of this entry »

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Business Times

Monday, 12 Oct, 2009

Malaysian palm oil stocks in September jumped 11.5 per cent to 1,578,255 tonnes from a revised 1,415,853 tonnes in August, industry regulator Malaysian Palm Oil Board said today.

September’s rise beat market expectations for a 7.4 per cent increase to 1,520,000 tonnes in a Reuters poll issued last week.

Traders said the stock levels may come under pressure this month after a cargo surveyor over the weekend reported an 8.27 per cent jump in October 1-10 exports, signalling a recovery in demand that may support prices.

Before the MPOB release, Malaysian palm oil closed up 2.1 per cent at midday as traders took positions on cargo surveyor’s bullish estimate for October’s first ten days of exports, having priced in the rise in September’s stocks.

“No matter what happens, palm oil stocks are going to maintain September’s levels for this month and next because production will keep the same pace and exports will start rising,” said a trader with a local commodities brokerage. Read the rest of this entry »

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Monday, 12 Oct, 2009

OBSERVATIONS: Lifted by a combination of short-covering and fresh buying interest, the Kuala Lumpur CPO futures benchmark December 2009 contract closed last Friday at RM2,085 a tonne, up RM49 or 2.41 per cent over the week.

The price rise, however, was really nothing to shout about.

Because of market players’ prevarication and the uncertainly over direction, trading for much of the week was done Read the rest of this entry »

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