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PALM OIL STOCKS
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Stockking
Master |
27-Aug-2008 22:46
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As expected...Wilmar continue to plunge!
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investor38
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27-Aug-2008 21:33
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China, India fuel commodities gains
2008-08-27 18:25:00
Corn, Soybeans Advance as Dollar's Gain Stalls, Crude Oil Rises
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investor38
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27-Aug-2008 21:12
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http://www.palmoilhq.com/out/producers-say-palm-oil-prices-have-hit-bottom Palm oil prices have hit 'bottom': Producers Added 4 hours ago - Palm oil prices have reached a "bottom" and will be supported by declining supplies and increasing demand for biodiesel, Derom Bangun, chairman of the Indonesia Palm Oil Association, said. Prices of the cooking oil reached US$825 a ton on a cost-and-freight basis in the port of Rotterdam about 10 days ago, or about US$750 a ton in Malaysia, Bangun said in an interview with Bloomberg Television today. Palm oil, used in cooking and as an alternative fuel, slumped 7.9 per cent this week as supplies from Indonesia and Malaysia outpaced demand. The price has plunged 18 per cent this year. Indonesia, the biggest grower, may produce more than 19 million tons this year and Malaysia more than 17.4 million tons, Dorab Mistry, director at Godrej International Ltd, has said. "Supply will get tight in the long term and prices of palm oil may rise in the fourth quarter," Miang Chuen Koh, analyst at Morgan Stanley Asia (Singapore) Pte, said by phone today. "Demand will pick up from the food side as well as biodiesel." The palm oil price for November delivery jumped as much as 4.7 per cent in Kuala Lumpur today to RM2,523 (US$748) a metric ton and traded at RM2,500 at 12.30 pm Malaysian time. "Recently prices dropped from over US$1,200 a ton in Rotterdam to US$825," Bangun said. "Last week prices rebounded to US$880-US$900 although they fell again yesterday to US$860. Prices will remain there and are not going further down." Production Drop Output will decline after the peak production season in Malaysia and Indonesia ends in September, Bangun said. "What happens now is a kind of temporary oversupply" as traders and processors built up excessive inventory at high prices without noticing weakening demand, he said. "That's why for some time they don't buy any more palm oil, causing prices to drop to such a low level." The Indonesia Palm Oil Association is an organisation of crude palm oil producers, consisting of state-owned and non-state plantations, foreign-owned plantations and cooperatives of oil-palm growers. Malaysia is trying to "ensure there is no oversupply," Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said in an interview yesterday. "We're encouraging the industry to clear their stocks and asking companies not to import" crude palm |
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investor38
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27-Aug-2008 20:33
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Interesting article By Dorab Mistry Palm oil may only benefit from biofuels demand
2008-08-27 16:10:00
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investor38
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25-Aug-2008 08:52
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Crude oil price steady and soya bean futures positive. may provide some support for CPO!
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investor38
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23-Aug-2008 12:36
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Oil Tumbles More Than $6 on Stronger Dollar, Pipeline Restart
By Mark Shenk Aug. 22 (Bloomberg) -- Crude oil fell more than $6 a barrel, dropping the most in percentage terms since December 2004, as the U.S. dollar strengthened and BP Plc restored shipments on a Caspian Sea pipeline through Turkey. Energy futures fell as the rising dollar eased demand for commodities as an inflation hedge. The Baku-Tbilisi-Ceyhan pipeline, which moves oil from Azerbaijan through Georgia to Turkey's Mediterranean coast, resumed normal flows today after a fire shut it earlier this month, a Turkish official said. ``The dollar sent oil prices higher yesterday and lower today,'' said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. ``The reopening of the BTC pipeline through Turkey is being greeted with relief because there will be additional barrels of really good-quality crude available.'' Crude oil for October delivery fell $6.59, or 5.4 percent, to settle at $114.59 a barrel at 2:49 p.m. on the New York Mercantile Exchange, the biggest drop on a percentage basis since Dec. 27, 2004. In dollar terms, it was the biggest decline since Jan. 17, 1991, when U.S.-led forces expelled Iraq from Kuwait. Futures erased yesterday's $6.20 gain. The October contract rose 0.6 percent for the week. The dollar climbed 0.9 percent to $1.4772 per euro in New York from $1.4899 yesterday, when it fell 1 percent, the biggest decline since June. Dollar-based commodities such as oil and gold are often viewed by investors as a store of value when the currency weakens. ``It's hard to tell whether the dollar is shifting oil or the opposite,'' Mueller said. ``It's obvious that there is a relationship and that they intensify the moves of each other.'' Caspian Supplies BP, Europe's second-largest oil company, StatoilHydro ASA and partners cut output at Caspian oil fields following the closure of the 1,768-kilometer (1,100-mile) link on Aug. 5. The pipeline is used to carry oil from Azerbaijan through Georgia to Turkey, where it's loaded onto tankers for U.S. and European markets. BP said loadings are scheduled to begin next week. ``The pipeline's flow has returned to normal levels,'' Akif Sam, a spokesman for the Turkish Energy Ministry, said in a telephone interview. A Ceyhan loading schedule yesterday showed 24 cargoes totaling 18.2 million barrels, or an average of 868,155 barrels a day, will be exported from Aug. 25 to Sept. 14. ``The volume of oil will be ramped up over the weekend, and if everything is set, loadings will begin on Monday,'' said Murat Lecompte, a spokesman for BP in Istanbul. He said some of the oil would be used to replenish supply depots. Russian Invasion The shutdown of the BTC pipeline was followed three days later by Russia's invasion of Georgia, which further disrupted Caspian fuel shipments. Oil prices have also fallen on reduced demand in the U.S., the country responsible for almost a quarter of global oil use. The credit crisis has led to a higher U.S. jobless rate and slower economic growth this year. ``The economy continues to be on the bearish side of the ledger while geopolitical concerns are on the bullish side,'' said Christopher Edmonds, the managing principal of FIG Partners Energy Research & Capital Group in Atlanta. ``In between, there is the dollar, which can send prices either way. I think Russia and the dollar will determine what prices do next week.'' Sixteen of 29 analysts surveyed by Bloomberg News, or 55 percent, said prices will increase through Aug. 29. Seven of the respondents, or 24 percent, said oil will be little changed and six said there would be a drop in prices. Last week 63 percent expected prices to increase. Brent Oil Brent crude oil for October settlement declined $6.24, or 5.2 percent, to settle at $113.92 a barrel on London's ICE Futures Europe exchange. Crude oil may tumble to $80 a barrel within 12 months on increasing supplies of alternative energy, while grain prices may climb on emerging-market demand, said Renee Haugerud, whose hedge fund gained 18 percent this year. The surge in oil has been ``overdone'' by investors seeking holdings in raw materials through the Standard & Poor's GSCI Index, a commodity gauge weighted toward energy, she said. Industrial metals also rose too high, she said. The Organization of Petroleum Exporting Countries will probably increase oil supply in August by 400,000 barrels a day, or 1.2 percent, as Iran releases crude oil held in storage, according to preliminary estimates from PetroLogistics Ltd. OPEC will next meet to review production targets on Sept. 9 in Vienna. Gasoline for September delivery fell 17.66 cents, or 5.8 percent, to settle at $2.8686 a gallon in New York. Pump prices haven't increased since July 19, according to AAA, the nation's largest motorist organization. Regular gasoline, averaged nationwide, fell 1 cent to $3.692 a gallon, AAA said today on its Web site. Prices reached a record $4.114 a gallon on July 17. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net. Last Updated: August 22, 2008 15:59 EDT By Jon Nadler Bernanke spoke. Markets listened. Speculators acted. The public continues to scratch its collective head. How and when will the storm end? We found the passage from his speech referring to the trend in commodities and the dollar as most relevant. "Recent developments in commodity prices and the dollar, combined with slower growth, should lead inflation pressures to ease, Bernanke told policymakers and leading economists attending the Fed's annual retreat in Jackson Hole. The recent decline in commodity prices and the increased stability of the dollar have been welcome trends. If not reversed, these developments, together with a pace of growth that is likely to fall short of potential for a time, should lead inflation to moderate later this year and next year." Read into these words what you will; we interpret them to imply that if the dollar slips back towards where it was aiming in mid-March and mid-July, the Fed will pull the interest rate trigger sooner rather than later. Ditto, if it senses that oil and other inflation-boosting commodities start getting out of hand again. There are, of course, other triggers to resort to (as in regulatory ones) as regards excessive speculation in commodities and/or currencies. That seemed to have been implied as well. In light of this type of prospect, I we are not sure we would be running out, backing up the truck to load up on additional commodities positions. Stocks appeared to react with a positive response to the speech. Oil gave up more than half of yesterday's gains. Gold looks like it could well retest $800 again. Mr. Bernanke also used the "too big to fail" term several times during his speech when referring to financial market instability. The take-home notes from today's presentation may conclude that while Fannie and Freddie will very likely not be left to curl up and die, there might be one or two firms which - if not successfully adopted by outside interests - could be allowed to go under and restore the sense of fairness as regards to the 'moral hazard' issues that many are obsessing about. In all a reassuring talk, but one that admits that we still have problems remaining and that their sorting out could extend up to the next such late-summer Jackson Hole summit. Our take is that the '09 meeting might be considerably more upbeat. Jon Nadler is a Senior Analyst with Kitco Bullion Dealers Montreal CPO futures likely to fall in tandem on Monday. Palm oil counters will most likely give back some of its recent gain. The Fed is trying to maintain a slow but sustainable economic growth and at the same time keep inflation in check, as the financial sector worms its way out of its current mess . Although a high crude oil prices favours commodities in general; prolonged high crude oil prices will stultify economic growth in general leading to a world wide recession which will obviously impact all sectors of the economy including commodities. The best scenario for palm oil counters is for crude oil to remain between $US 100 to $US 120 levels. The long term trend for commodities will still be positive with increasing world population and affluence and hence demand especially from China and India. |
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investor38
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22-Aug-2008 19:38
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Heavy investor = plenty of $$. Thanks for the compliment! Yes I am vested if that's what you want to know. You are welcome to post your opinion contrary or otherwise but well substantitated if possible. Cheers. CPO prices up sharply again today.
Need to watch crude oil prices closely.
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danielb
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22-Aug-2008 13:28
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Hmmm ..... I just realised this is practically a single poster topic. Nobody else seems to post here. And very likely the poster is a very heavy investor in palm oil stocks ..... | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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investor38
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22-Aug-2008 12:41
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Why oil won't fall below $100With a surge in the price of global commodities, it's costing more to produce a barrel of oil than ever before. NEW YORK (CNNMoney.com) -- Last week, falling oil prices looked unstoppable. The last few days have seen a halt in that slide. Still with prices well below the record set in July and a shaky world economy threatening demand, the question remains: How low can oil go? Many analysts say oil is unlikely to go much lower than $100 a barrel, and it has to do with the rising cost of production. The the overall cost to produce oil has gone up, especially oil from tough to reach places like Canada's tar sands and the deep water Gulf of Mexico. These areas require massive investment and materials to produce oil and that expense has risen as the price of commodities surge. And while they represent a small fraction of total worldwide production, they're important because some analysts believe prices won't fall below the cost of the most expensive barrel of oil. "I don't think it will go down below $100 for very long," said Christopher Ruppel, an energy analyst at Execution LLC, a broker and research firm for institutional investors like hedge and mutual funds. "Once you go down too low, you'll shut down new production, and prices will go right back up." Tar sands: A sticky situation Oil from Canada's tar sands, currently producing about 1.2 million barrels a day, is arguably the most expensive oil in world, and is getting even more expensive. Last year analysts estimated it cost around $60 a barrel to produce light oil from here. The most recent estimate from the Canadian Association of Petroleum Producers (CAPP) now puts that number at $75 to $90. Comparatively, Saudi Arabian crude is said to cost around $1 a barrel. The main culprit behind the increase is the price of steel. With the world undergoing a boom in building, steel's price has surged - it's up 80% just since the start of this year. From the massive trucks it takes to mine the oily sand, to the miles of pipes, tubes and towers it takes to refine the heavy oil into a desirable light, sweet crude, it takes a huge amount of steel make the tar sands run. CAPP estimates 50 to 60% of a tar-sand operation is affected by steel prices. Beyond Tar Sands Other analysts think oil prices have room to drop below $100 saying that production from expensive places wouldn't stop even if it became unprofitable. The thinking goes something like this: Since it costs billions to invest in an oil operation like tar sands, it will still cost less to pump and sell that oil than it would to pay the interest on idle equipment. "Even if your not covering all your costs, it's still a source of cash coming in," said Paul Weissgarber, an energy expert at the management consultants AT Kearney. Alex Archila, chief executive of Madagascar Oil argues that it's not the cost of current oil that sets the price of a barrel, but what it would take to bring future oil online. "I'm not sure the logic of relating the most expensive barrel of oil and floor for oil prices is really right," Archila said. Even if it's all about future production, things still don't look good for a return to $50 crude. Peter Robertson, vice chairman of Chevron, recently told lawmakers that the cost of new production in the deep water Gulf of Mexico could exceed $95 a barrel. Even Archila thinks the cost of the next barrel of oil is somewhere around $80. "And next year, it could be $90 or $100," he said. Oil in a volatile environment Events over the last few days - from talk of an OPEC production cut, trouble in Georgia, and renewed credit fears pushing investors into oil futures - have helped crude prices regain some of the ground they lost over the last month. It's hard to tell if the rise over the past few days will be a longer-term trend, or merely a blip as a slowing global economy and slackening demand cause oil prices to fall further. On the trading floors, talk seems to be of prices going higher, with or without expensive barrels of oil leaving the market. "I'm a bull here," Ray Carbone, a broker and trader at Paramount Options, recently told CNNMoney. "If anything, non-OPEC production has gone down, we've had no change in supplies, and we have to watch out for OPEC threatening a production cut." "Perception is developing that the worst is over on the downside for several reasons," Nauman Barakat, an energy trader at Macquarie Futures, the trading arm of Macquarie investment bank, wrote in a research note Thursday. "It looks like the sands are shifting and the sentiment is to buy." 
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investor38
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22-Aug-2008 12:16
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Commodities Rally, Heading for Biggest Weekly Jump Since 1975 By Millie Munshi 
Aug. 22 (Bloomberg) -- Commodities headed for their biggest weekly gain in 33 years as oil traded near a three-week high and a weakening dollar revived demand for raw materials as alternative assets. The Reuters/Jefferies CRB Index of 19 commodities soared 3.7 percent to 405.92 in New York yesterday. A settlement at that level today would mark a 6.2 percent gain for the week, the most since July 1975. The dollar headed for its first weekly decline against the euro since July 11, while oil traded near $121 a barrel after jumping more than $5 yesterday. A rebound in the CRB and a resumption of the dollar's decline may stall a rout in commodities that has sent the index down 14 percent from a record on July 3. Raw materials priced mostly in dollars often move in the opposite direction of the U.S. currency. The dollar ``had caused people to sell commodities aggressively, and a lot of that selling became overdone,'' said Chip Hanlon, who helps manage $1.5 billion at Delta Global Advisors in Huntington Beach, California. ``This move may tell us that those downtrends are over. Commodities could continue to rally from here.'' Gold for December delivery gained as much as $2.50, or 0.3 percent, to $841.50 today, after yesterday posting its biggest advance since June. The contract was last at $839.10. Platinum for October delivery traded at $1457.40 an ounce, after jumping 6.6 percent to $1458.80 yesterday, the biggest gain since September 2001. Every commodity on the CRB except hog futures moved higher yesterday. Nickel jumped 8 percent, cocoa rose 6.8 percent and silver rallied 5.2 percent. Chinese Demand Commodities are also gaining on speculation demand will increase from China as the country resumes work at factories and infrastructure projects that were shut or slowed during the Olympics, which end Aug. 24. ``China's demand is very important to the commodity markets,'' Hanlon said. ``Now that they're ready to start bringing back factories that had been idled, I wouldn't be surprised to see demand start to pick up again there. Their long-term outlook for growth and development hasn't changed.'' The CRB has more than doubled since 2001 as demand surged in China, the world's fastest-growing major economy. Mining and oil companies, farmers and other commodity producers have struggled to keep up with rising consumption as harsh weather and labor unrest disrupted supplies. ``Until either a lot of supply comes onstream or the economy collapses, the bull market will continue,'' said investor Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,100 an ounce. Top Gainers Yesterday's gains in the CRB were led by nickel futures that rose to their highest price since July 11. Cocoa climbed the most since November 2004 in New York. The International Cocoa Organization said a global deficit will be twice as large as previously expected, with output trailing demand by 88,000 metric tons in the year through September, up from an earlier forecast of 41,000 tons. ``That news, along with dollar weakness, powered strong early-morning gains,'' Dan Vaught, an analyst for Wachovia Securities LLC in St. Louis, said in a report. The UBS-Bloomberg Constant Maturity Commodity Index rose 4 percent to settle at 1,509.378 yesterday. A settlement at that price today would mark a 6.9 percent gain this week, the most since the data starts in 1997. To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net Last Updated: August 21, 2008 20:26 EDT Time to Get Back In ????. Caveat emptor |
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dc16888
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22-Aug-2008 12:15
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Hi Investor38, great info. Thks for sharing. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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investor38
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22-Aug-2008 12:01
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As of now, Crude oil prices steady in Asian trading. CPO price up strongly in morning trade. Indo agri up 7.6%, golden agri up 6.7%, FR up 5.3% and Wilmar, 2.4%.
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investor38
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22-Aug-2008 08:51
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By all indicators, looks like commodity counters likely to trade up sharply today as almost all of them are at rock bottom prices relative to their recent high. No inducement to buy. Caveat Emptor. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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investor38
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21-Aug-2008 22:53
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With Crude Oil prices hovering at US$120/barrel, commodities are rallying again. If oil price remains up, expect Palm oil counters to reverse its downward trend and start rallying again from tomorrow. Most palm oil counters have been bashed down to strong long term support levels. Crude oil prices are likely to be remain high because of geopolitical tension, hurricane threat and increase in demand from China after the Olympics. Golden agri, FR, Indo agri and Wilmar has been sold down to way oversold territory because of recent severe and sudden correction in crude oil prices. The so-called demand destruction of crude oil prices and commodities has not really taken place based on current data. With crude oil prices moving up again, looks like a sharp reversal in palm oil counter prices is very likely. Demand for palm oil as biofuel looks more and more attractive and it is inevitable that this will put an upward pressure on CPO futures. In my opinion, with most palm oil counters currently trading at very strong long term support levels, upside potential is very good. Vested. Caveat emptor. |
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investor38
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21-Aug-2008 15:55
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Aug. 20 (Bloomberg) -- U.S. stocks climbed, led by energy and metals shares, after Goldman Sachs Group Inc. predicted oil will gain 29 percent through the end of the year and Morgan Stanley advised buying Freeport-McMoRan Copper & Gold Inc. ``The economy is probably going sideways with very little growth, so people are gradually gravitating back toward energy and basic materials as safer places,'' said Mark Bronzo, a money manager at Security Global Investors, which oversees $11 billion in Irvington, New York. ``We have a bigger bet on basic materials than we do on energy, but essentially they're trading the same.'' Goldman maintained its forecast that crude will reach $149 a barrel even after oil futures slid $30 from their July 11 record of $147.27 a barrel. Fundamentals of supply and demand are still more important in setting oil prices than investor flows linked to movements in the U.S. dollar, Goldman added. Oil rose 0.8 percent to $115.47 a barrel today. CPO futures up sharply past two days. Anticipating a rebound in crude oil prices and commodity prices???? Time to get into palm oil stocks which have been sold down by more than 50% in some cases??? |
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Stockking
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15-Aug-2008 21:26
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Unfortunately bad post for stockking wouldn't help Wilmar from plunging!
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investor38
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15-Aug-2008 15:25
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Oil May Rise on Declining U.S. Gasoline Supplies, Survey Shows By Mark Shenk Aug. 15 (Bloomberg) -- Crude oil may rise next week as U.S. gasoline inventories fall because refineries are cutting output in response to low profit margins. Nineteen of 30 analysts surveyed by Bloomberg News, or 63 percent, said prices will increase through Aug. 22. It was the most bullish response since December 2006. Seven of the respondents, or 23 percent, said oil will be little changed and four said there would be a drop in prices. Last week 37 percent expected a decline and 34 percent said there would be a rise. U.S. gasoline supplies dropped 6.39 million barrels to 202.8 million barrels last week, the biggest decline since October 2002, according to an Energy Department report on Aug. 13. Refineries operated at 85.9 percent of capacity, down 1.1 percentage point from the week before, the report showed. The supply report ``was one of the most bullish in a year,'' Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky, said yesterday. Lower margins, or the profitability of refining, reduced the incentive for refiners to process crude oil into gasoline and other fuels. The margin, or crack spread, for making three barrels of crude into one of heating oil and two of gasoline has dropped 51 percent to $9.959 a barrel since June 3. Crude oil for September delivery fell 19 cents to $115.01 a barrel so far this week on the New York Mercantile Exchange. Futures have dropped 22 percent since touching $147.27 a barrel on July 11, the highest since trading began in 1983. The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004. Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:
RISE NEUTRAL FALL
19 7 4
This should provide some support to palm oil prices which is down today.
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investor38
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14-Aug-2008 21:38
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WILMAR’S 2QFY08 EARNINGS MORE THAN TRIPLED TO US$332 MILLION - Higher sales volume and improved margins boost the merchandising & processing segment - Plantations gained from higher CPO prices and increased production - Positive effects from merger with Kuok Group’s palm plantation, edible oils, grains and related businesses - 2QFY08 net profit of US$332 million represents an increase of 227% over 2QFY07 and 139% over proforma 2QFY07 - EPS climbs from 3.82 US cents to 5.07 US cents Singapore, August 14, 2008 – Wilmar International Limited (“Wilmar” or “the Group”), Asia’s leading agribusiness group, more than tripled its net profit to US$331.7 million for the quarter ended June 30, 2008 (“2QFY08”). Revenue for the quarter was 162% higher, at US$7.83 billion. Wilmar’s strong performance was achieved through increased sales volume, enhanced margins and higher prices of crude palm oil over the same period last year (“2QFY07”). The US$331.7 million net profit for 2QFY08 is an increase of 139% over proforma net profit of US$138.8 million for 2QFY07. The proforma net profit includes Kuok Group’s results before the merger. Mr Kuok Khoon Hong, Chairman and CEO of Wilmar said, “Most of our business divisions delivered strong performance due to the favourable operating environment during the quarter.” Cumulatively, the Group’s earnings for the half year ended June 30, 2008 (“1HFY08”) increased more than four-fold to US$674.8 million. SEGMENTAL HIGHLIGHTS Merchandising and Processing – Palm & laurics Revenue for the quarter was up 116% while pretax profit soared 188% to US$140.0 million, led by higher sales volume and margin expansion. Sales volume grew by 37% to 4.6 million metric tonnes (“MT”) on increased demand from China, India, Europe, Russia and the Middle East as well as full contribution from Kuok Group’s operation, compared to a one-month contribution in 2QFY07. The Group’s margins reflected the general improvement in industry processing margins and merger synergies. Industry margins strengthened on the back of increased supply of raw materials coupled with increased demand of refined products. For 1HFY08, the segment registered pretax profit of US$265.7 million, up 222%. Merchandising and Processing – Oilseeds & grains Revenue tripled to US$2.17 billion while pretax profit surged 346% to US$147.1 million over the same quarter last year. The significant improvement in earnings was driven by better crushing margins and growth in sales volume following a recovery in the livestock industry in China post the blue ear disease. The industry was afflicted by the blue ear disease during the first half of 2007. Sales volume for 2QFY08 increased 57% to 3.3 million MT. Pretax profit for the segment rose by more than eight fold to US$351.9 million in 1HFY08. Consumer Products With the inclusion of Kuok Group’s consumer products business following the merger, this segment saw a big jump in revenue to US$1.15 billion from US$83.9 million, and a 351% growth in sales volume to approximately 694,000 MT for 2QFY08. However, pretax profit grew at a lower rate of 129% to US$12.2 million, attributable to higher cost of edible oils, its key raw material, while selling prices remained unchanged during the quarter. For 1HFY08, the segment recorded a pretax profit of US$28.2 million, an increase of 277% over last year. In January 2008, the Chinese Government implemented temporary price intervention measures, requiring approval for upward price adjustments to selected consumer food products, including cooking oil. In April 2008, the Group received approval for a 10% price increase on its consumer pack cooking oil products, but selling prices were maintained in view of softening edible oil prices. With further softening in edible oil prices since end-June 2008, the Group has decided to lower its selling prices by approximately 12%, with effect from today. Plantations and Palm Oil Mills This segment’s robust performance was achieved through higher prices of crude palm oil and higher production volume. The Group’s own fruit production grew by 74% owing to the full impact of the merger, better yield and an increase in mature hectarage. Production yield for the quarter was firmer at 5.0 MT/hectare from 4.9 MT/hectare a year ago. Revenue more than doubled to US$371.8 million while pretax profit climbed 239% to US$79.6 million for the quarter. Pretax profit soared 356% to US$164.8 million for 1HFY08. Others Revenue from this segment, mainly from the sale of fertilisers, rose 210% to US$248.0 million on higher sales volume and selling prices. Sales volume grew by 12% while average selling price more than doubled, resulting in significantly enhanced margins. The segment achieved a pretax profit of US$30.5 million for the quarter, up from US$3.6 million last year. For 1HFY08, pretax profit was US$61.6 million, up from US$4.5 million in the corresponding period last year. Associates The Group’s key associates are primarily engaged in oilseeds crushing and consumer products businesses in China. Associates’ contribution for the quarter almost doubled to US$29.1 million, in line with the improved operating environment for oilseeds crushing over the same period last year. Balance Sheet As at June 30, 2008, the Group’s total assets stood at US$19.40 billion while shareholders’ funds amounted to US$8.43 billion. Net gearing ratio inched up slightly to 0.6x from 0.5x as at December 31, 2007, due to higher working capital requirements. Prospects And Future Plans Prices of commodities, including crude oil and palm oil, have been falling since early July 2008. Unless the price of crude oil spikes up again or the weather in the US deteriorates, palm oil prices are likely to remain subdued. This is due to ample supply from both Malaysia and Indonesia and moderating demand for palm oil from a slowing global economy. While lower edible oil prices will affect plantation earnings, downstream businesses will benefit. In addition, the Group’s businesses in China are expected to perform well. Despite some anticipated moderation, China’s economic growth will still be relatively high. Therefore, the Group is optimistic that its performance for the year will be satisfactory. “The resilience of our integrated business model will be apparent as the industry heads into a more challenging operating environment. In addition, such an environment may present new growth opportunities for the Group. We have the resources and financial strength to seize attractive new opportunities while continuing to pursue existing strategies,” added Mr Kuok. About Wilmar Wilmar International Limited, founded in 1991 as a palm oil trading company, is today Asia’s leading agribusiness group. It ranks amongst the largest listed companies by market capitalisation on the Singapore Exchange. Its business activities include oil palm cultivation, edible oils refining, oilseeds crushing, consumer pack edible oils processing and merchandising, specialty fats, oleochemicals and biodiesel manufacturing, and grains processing and merchandising. Headquartered in Singapore, its operations are located in more than 20 countries across four continents, with a primary focus on Indonesia, Malaysia, China, India and Europe. Backed by a staff force of more than 70,000 people, over 160 processing plants and an extensive distribution network, its products are sold to more than 50 countries globally. Over the years, it has established a resilient integrated agribusiness model that captures the entire value chain of the agricultural commodity processing business, from origination and processing to the branding, merchandising and distribution of a wide range of agricultural products. Through scale, integration and the logistical advantages of its business model, it is able to extract margins at every step of the value chain, resulting in significant operational synergies and cost efficiencies. ISSUED ON BEHALF OF : Wilmar International Limited BY : Citigate Dewe Rogerson i.MAGE Pte Ltd 1 Raffles Place #26-02 OUB Centre SINGAPORE 048616 For CDRi.MAGE CONTACT : Mrs Elaine Lim / Ms Lee Ching Wern DURING OFFICE HOURS : 6534-5122 (Office) AFTER OFFICE HOURS : 9751-2122 / 9781-1509 (Mobile) EMAIL : elaine.lim@citigatedrimage.com / chingwern.lee@citigatedrimage.com 067/08/002/WIL Aug 14, 2008 |
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investor38
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14-Aug-2008 16:17
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Strong commodity futures opening in Europe plus strong CPO futures fueling sudden interest in oversold palm oil counters!. Hopefully it lasts | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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investor38
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14-Aug-2008 11:14
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Commodity Online In a surprise revelation, the US Department of Agriculture’s forecast has said that the that 2008-09 soybean production would total 2.973 billion bushels, down from the July estimate of 3 billion. This prediction has provided the Chicago Board of Trade soybean market with its first taste of fundamental directives to digest in early five weeks. According to market analysts, the market will begin its shift back to a fundamental focus with the crop report laying the ground work for future direction, even though the report’s estimates are taken with a grain of salt amid late developing crops. The average of analysts estimates anticipated a crop size of 3 billion bushels. The USDA estimated 2008-09 soybean planted acreage at 74.8 million acres, up from 74.5 million in July. Harvested acres were pegged at 73.3 million acres, up from 72.1 million in July. The 2008-09 US soybean yield was estimated at 40.5 bushels per acre down from July estimate of 41.6. Disinvestment in commodities will continue to provide resistance to upside price movement. Analysts said there’s not much to count in the fields with crops weeks behind in development, leaving a lot of room for change in the soybean yield forecast in September. The trade is expected to take a cautious approach to market activity in the next four weeks amid tight projected ending supplies, and the lingering threat of weather on yields. However, the market must provide some stimulus to encourage Brazil and Argentina to ramp up soybean production. The USDA forecast 2008-09 US soybean ending stocks at 135 million bushels, compared to 140 million in July and the 2007-08 soybean stocks at 135 million also, up 10 million from in July. The average of analysts’ pre-report estimates was 130 million. Market fundamentalists look at value, and with crude oil trading at more than $100 a barrel, fertilizer costs will stay high. That does not bode well for grain prices to retreat significantly in the long run. Lower prices will also attract demand, and that will limit downside risks as well, he added. The market is still faced with a tight US stocks situation, and once the fund liquidation has run its course, the soybean futures market focus will shift to inventories. The lack of threatening weather for developing Midwestern crops in the US as well as the resolution of an Argentine farmers strike left CBOT soy futures at the mercy of outside market influences. CPO futures up sharply on higher soya futures and lower crude oil inventories and higher commodity indices. Reversal of commodity plunge? |
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