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Malaysian Stockpiles Jump, Pressuring Palm Oil Prices

12

Jul

Malaysian Stockpiles Jump, Pressuring Palm Oil Prices

At the close of trading on Monday (11/7) futures contracts for CPO for delivery September 2016, the active contract on the Bursa Malaysia, fell 2 [...]

Malaysian Stockpiles Jump, Pressuring Palm Oil Prices. At the close of trading on Monday (11/7) futures contracts for CPO for delivery September 2016, the active contract on the Bursa Malaysia, fell 2 points or 0.09% to 2,359 ringgit per ton. This figure shows that throughout the current year, the price has already dropped 12.33%.   According to a Bloomberg survey median that involved eight respondents from analysts, contractors and traders, CPO stock in Malaysia stood at 1.72 million at the end of June, up 4.2%. Meanwhile, CPO production leapt 10% to 1.49 million tons, or increased 4.9%. In terms of exports, overseas shipments are predicted to decrease by 5.5% to 1.21 million tons, or the lowest level since 2008.    The Malaysian Palm Oil Board (MPOB) itself will release the official data on Tuesday (12/7/2016).   The Malaysian Palm Oil Association that manages a number of producer companies predicted CPO production last month would increase 10.5% to 1.51 million tons. This is based on the plant’s harvesting cycle and the lackluster demand for products made from palm oil.    The decreased exports are predicted to be because the Ramadan holiday period did not cause a spike in consumer demand. The main reason for this is the way purchases dropped in India, with its CPO import rate falling by 46% in June to 195,105 tons.    Ivy Ng, Regional Head of Plantations at CIMB Investment Bank Bhd, said that negative sentiment toward CPO meant the price this month will lie in the range of 2,300-2,600 ringgit per ton. The higher palm oil production is a sign that the poor weather from El Nino is improving.    Alan Lim, an analyst for MIDF Research, said in his research publication that CPO supplies in Malaysia, as the second largest palm oil producer in the world, reached 1.83 million tons at the end of June due to weakening demand. Last month’s export data showed a decrease of 10%. Despite that, supply is still under the 2 million ton psychological threshold, so it continues to support price stability. “We are maintaining the assumption that the average CPO price for 2016 will reach 2,450 ringgit per ton, up 14% from 2015, which was valued at 2,153.5 per ton,” he explained in the study that was cited by Bisnis.com on Monday (11/7/2016).  Source: Bisnis Indonesia

OIL PRICE: US Dollar Strengthens, WTI Falls to US$44.76/barrel

12

Jul

OIL PRICE: US Dollar Strengthens, WTI Falls to US$44.76/barrel

West Texas Intermediate crude for August delivery fell 65 cents to settle at $44.76 a barrel on the New York Mercantile Exchange on Monday, or [...]

OIL PRICE: US Dollar Strengthens, WTI Falls to US$44.76/barrel. West Texas Intermediate crude for August delivery fell 65 cents to settle at $44.76 a barrel on the New York Mercantile Exchange on Monday, or Tuesday morning Jakarta time. Meanwhile, Brent for September settlement lost 51 cents, or 1.1 percent, to $46.25 a barrel on the ICE Futures Europe exchange, the lowest close since May 10, 2016. The number of oil rigs operating in the US climbed by 10 last week to 351, according to data from Baker Hughes Inc. cited by Bloomberg. Oil prices fluctuated on Monday following a global stock market rally and a stronger US dollar, which reduced the appeal of commodities priced in the currency. “Oil has been choppy,” Phil Flynn, senior market analyst at Price Futures Group, told Bloomberg. It initially fell on concerns over rising supplies then advanced as stocks rallied, and ultimately settled lower on the stronger US dollar, he added. The Standard & Poor’s 500 Index climbed to a fresh record, while the Bloomberg Dollar Spot Index, which measures the greenback against 10 major currencies, rose as much as 0.6 percent on Monday. “The dollar index going higher at the same time that stocks are going higher is creating a bit of a mixed signal,” Bob Yawger, director of energy futures at Mizuho Securities USA, told Bloomberg. Source: Bisnis Indonesia

RUBBER PRICES ON JULY 12: Extending Strength Ignores Yen

12

Jul

RUBBER PRICES ON JULY 12: Extending Strength Ignores Yen

Rubber price rose by 0.60% or 0.90 points to 151.20 yen per kilogram (kg) at 7:09 WIB. Previously, rubber price opened with an increase by 0.20% or [...]

12

Jul

Cocoa Prices Jump After Brexit Vote

Cocoa futures traded in London climbed to the highest level since 1977, boosted by a drop in the pound since the U.K. voted to leave the European [...]

Cocoa Prices Jump After Brexit Vote. Cocoa futures traded in London climbed to the highest level since 1977, boosted by a drop in the pound since the U.K. voted to leave the European Union, according to Bloomberg on Monday (11/7).
 
Since chocolate makers pay in euros or U.S. dollars, prices in both currencies have declined since the June 23 Brexit referendum.
 
“Cocoa is not more expensive, it’s a little bit cheaper than before the Brexit,” said Laurent Pipitone, economics and statistics director at the London-based International Cocoa Organization in a phone interview.
 
Futures for September delivery reached 2,520 pounds, or $3.24 a ton, on Friday on the ICE Futures Europe exchange, according to data compiled by Bloomberg. While prices in pounds have rallied 10 percent since the Brexit vote, they’ve dropped 1.1 percent in euros and 3.9 percent in dollars.
 
Cocoa is headed for a fifth straight annual gain, the longest run since at least 1989. Prices have climbed after dry weather in West Africa hurt one of two annual harvests, leading traders including Cargill Inc., Olam International Ltd. and Sucres et Denrees SA to predict a production shortfall.
 
Source Bisnis Indonesia

Palm oil industry faces major challenges

29

Jun

Palm oil industry faces major challenges

"In order to reduce losses as a result of the natural disaster, the company will continue to increase efficiency as well as utility in its [...]

Palm oil industry faces major challenges. "In order to reduce losses as a result of the natural disaster, the company will continue to increase efficiency as well as utility in its efforts, so that the financial indicators show positive progress and development," said President Director of PT Sawit Sumbermas Sarana (SSMS) Rimbun Situmorang to the press in Jakarta on Tuesday. According to him, the difficulties faced by the palm oil industry due to the impact of El Nino and the decline in CPO prices in the global market were not just experienced by the corporation but also by all similar industries nationally. Although it will face major challenges, he said, signs of improvement such as the increasing price of crude palm oil (CPO) are beginning to show a positive trend. Although the price of CPO is currently improving in the last few months, he added, the decline in commodity prices will still affect the corporation's performance in 2016, especially since El Nino, which has been occurring since 2015, is still ongoing and is predicted to continue to have an impact until the end of 2017. "Last year, El Nino caused the production of palm oil by the corporation to decline by 16 percent, and we predict that until the end of 2016, the corporation's CPO production will be corrected between 15 and 20 percent," he said. Rimbun predicts that palm oil production will improve again in 2017 or 2018. While the price of CPO in the global market in April-May averaged between 600 and 630 US dollars per metric ton. Although facing difficulties, he said, the corporation could still distribute cash dividends to shareholders of Rp168.27 billion or 30 percent of the net income of the corporation's fiscal year 2015. He stated that the corporation is still able to distribute shares in the midst of the downturn in the palm oil industry due to the increase in the performance of the corporation whose shares were recorded in the capital market since December of 2013 being significantly noticeable. The area of the corporation's acreage currently reaches 69,841 hectares, up 105 percent compared to 2014, while until the end of 2015, the number of fresh fruit bunches (FFB) processed in factories owned by the corporation reached 1.35 million tons which produced 321,238 tons of CPO. The average age of the corporation's palm oil plants reaches seven years and the majority of plants will enter a peak year of production in the next three to five years. The corporation's management this year has allocated Rp450 billion in capital expenditure (capex), and in the first three months, the funds taken from cash were absorbed 20 percent, which was used for fertilization and planting palm oil trees.
Editor: Ruslan Burhani

Rubber Price Drops, Gapkindo Urges Presidential Instruction

28

Jun

Rubber Price Drops, Gapkindo Urges Presidential Instruction

In a meeting with President Joko Widodo at the Merdeka Palace, Friday (24/6/2016), Gapkindo presented a number of challenges currently faced by the [...]

Rubber Price Drops, Gapkindo Urges Presidential Instruction. In a meeting with President Joko Widodo at the Merdeka Palace, Friday (24/6/2016), Gapkindo presented a number of challenges currently faced by the national rubber industry that have caused the price of rubber to fall continuously and swiftly. Gapkindo Chairperson Moenardji Soedargo stated that the decision by the International Tripartite Rubber Council (ITRC) as of March 1, 2015 to halt the export of natural rubber was able to stimulate the price from US$1/kg at the start of the year to US$1.5/kg in May.  However, throughout this month, the price of rubber has undergone a correction to the level of US$1.3/kg. As a point of reference, this price is still far below the peak of rubber sales in 2011 which reached US$5.5/kg. "The actions we have taken are short term, and we expect the government to provide long-term sustainability, one of which is with a presidential instruction to utilize this rubber, and the momentum now feels more intense," he stated after an audience with the President at the Presidential Palace complex, Friday (24/6/2016). Moenardji stated that entrepreneurs were prepared to enter the rubber processing sector if there was legal basis to provide guarantees to these entrepreneurs. "The President asked if entrepreneurs would invest in that sector if these actions were taken. We replied that if the President issues a presidential instruction and similar orders, then entrepreneurs would definitely prepare to enter this sector," he explained. The commitment to increase domestic use of natural rubber is actually one of the points that was decided by ITRC member countries: Indonesia, Malaysia and Thailand, at the end of 2015. However, to date, there is no legal basis to accommodate this decision. Following this, discourse regarding the use of natural rubber for purposes other than tire manufacturing has continued to circulate. In the future, new investments will be developed to create new demand for a number of infrastructure projects, ranging from mixing rubber with asphalt to make roads (asphalt rubber), to dock buffers for port facilities, and the manufacture of water gates. According to Moenardji, these actions would boost the price of rubber in the long term, or complement the short-term scheme that has been decided upon by the ITRC, namely by reducing exports. In the meeting, Gapkindo also suggested that the government's plan to mandate the sale of Standard Indonesian Rubber (SIR) through the Indonesian Rubber Exchange be done voluntarily, not mandatorily, in order to boost rubber prices to competitive levels. Furthermore, Gapkindo also suggested that the government carry out comprehensive rehabilitation or replanting in rubber plantations in order to provide increased production capacity for rubber farmers, whose incomes have been severely eroded. Daniel Tirta Kristiadi, Operational Director of PT Kirana Megatara, stated that with extensive replanting, it is estimated that rubber farmers, who have been severely impacted by the drop in price, could see their income rise by 50% compared to the current situation. He stated that of the total national rubber production of 3.2 million tons last year, the 6 million rubber farmers produced approximately 2.5-3 million tons of this rubber directly.“This low level of productivity means that the supply of raw materials in Indonesia is still very low compared to the capacity of the factories absorbing these materials; this is an issue that the government will need to pay attention to moving forward,” he explained.
http://www.bumn.go.id/ptpn5/berita/17715/Harga.Karet.Jatuh,.Gapkindo.Desak.Inpres

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