Friday, 4 April 2014

Reuters Market Analyst Wang Tao On Palm Oil Technical Outlook Q2 2014


Here is the excerpt from the Reuters market analyst, Wang Tao, about the Palm Oil Technical Outlook for the second quarter of 2014:

Click on the image for better viewing

Source: Thomson Reuters - Inside Commodities

Wednesday, 2 April 2014

Palm Oil: The Other Kind of Oil Spill

Max laid hidden beneath the charred remains of a palm oil tree. He was frightened, injured, and falling in and out of consciousness. I clicked my tongue and inched closer, hoping to soothe him. He eyed me curiously, hugging tightly to the branches. All around, the Tanjung Puting National Park burned, accidentally set alight by plantation workers who had cleared the surrounding land to harvest the palm oil plant. Separated from his family, Max had fallen casualty to the plantation fire, sustaining burns to his face and body. In a swift move, I threw Max onto my back and raced toward the rescue team a few hundred meters away. As the smoke filled my lungs and hit my face, I felt Max’ grip become loose and his body become limp. Eventually his breathing stopped, and he died. 

Like thousands of orangutans before him, Max was the victim of a different kind of oil spill: the trade in palm oil. Palm oil monoculture is palming off orangutans in record numbers. Today, less than 70,000 orangutans exist in small wild pockets in the rainforests of Borneo and Sumatra. Populations are patchy and both species of orangutan are considered endangered, with conversion of land for palm oil plantation believed to be the species’ biggest threat.

Today, the controversial palm oil process is again at the forefront of environmental news, with Greenpeace staging international protests against a multinational consumer goods company for allegedly using palm oil tied to a supplier with links to tropical forest destruction.

Found in some 75 percent of everyday products, palm oil (sometimes known as vegetable oil) is the edible oil derived from the fleshy middle layer of the fruit of the oil palm. It acts as a cooking agent and is a popular household ingredient. As of 2010, it was the most widely used edible oil in the world, holding approximately 32 percent of the world’s oil market. Palm oil is found in McDonalds, Cadbury chocolates, Ben and Jerry’s ice cream, KFC and KFC packaging, Dove and Avon personal care products, Herbal Essence shampoo, Clinique cosmetics, Tim Tams, Kit-Kats and Malteasers, Ritz crackers, Colgate and Palmolive toothpaste, Mars Incorporated chocolates and in Mary Kay, Covergirl, Lancome, Sephora, and Urban Decay cosmetics. 

Scientists predict the average consumer uses at least one palm oil product per day. Approximately 66 percent of Indonesia’s palm oil plantations and 87 percent of Malaysia’s plantations involve some form of documented forest conversion, displacing orangutans and disorienting their ability to find food and seek shelter. Since plantations are often close to villages, lost orangutans sometimes encroach on human settlement. The results are often deadly.

In 2010, animal rights group International Animal Rescue recorded “unspeakable cruelty” toward orangutans in Peniraman, remote Borneo, after a female orangutan and her baby wandered nearby a plantation in search of food. Angry workers allegedly hurled stones and waved sticks at the mother before binding the pair with rope and forcing their heads under the water. The mother later died.

To resolve the palm oil problem, environmental organizations have proposed sustainable palm oil process like a “no deforestation” policy suggested by Greenpeace. The initiatives seek to effectively reduce the pressure on endangered orangutans and their habitats, inherently safeguarding their populations.

WWF has pointed out: “other big palm oil consumers such as Unilever, Ferrero, L’Oreal, Delhaize, Kellog and the world’s biggest palm oil trader, Wilmar International, have all committed to no deforestation.” Consumer support is also important in the protection of orangutans from harmful palm oil operations, WWF said, which can be facilitated by “palming off” unsustainable palm oil product.

Source: By Elissa Sursara,

Tuesday, 1 April 2014

Biggest Monthly Drop... - Reuters News

(CPO traders should know these general data)
* Palm prices fall 5.9 pct, biggest drop since Feb. 2013
* Malaysia's March palm oil exports fall 3.1-3.4 pct -cargo surveyors
* Palm oil to suffer 20 percent loss in 3 months -technicals By Anuradha Raghu

Malaysian palm oil futures fell to their lowest in a month and a half on Monday, with prices recording their biggest monthly drop in over a year as disappointing export data stoked worries about slowing global demand for the vegetable oil. Cargo surveyor Intertek Testing Services (ITS) reported that Malaysia's palm oil exports in March fell 3.1 percent to 1.21 million tonnes from a month ago, hurt by weak demand from the world's top edible oil buyers China and India.

Another cargo surveyor Societe Generale de Surveillance showed that exports for the same period fell 3.4 percent to 1.20 million tonnes shipped.

A stronger Malaysian ringgit also made the ringgit-denominated feedstock more expensive for overseas investors and refiners, curbing buying interest. The ringgit rose 0.2 percent to trade at 3.2660 against the U.S. dollar late Monday. "The weak exports are going to hold back the market," said a trader with a foreign commodities brokerage. "The strong ringgit is also a damper." The benchmark June contract on the Bursa Malaysia Derivatives Exchange had edged down 0.7 percent to 2,636 ringgit ($808) per tonne by Monday's close. Prices earlier fell to 2,626 ringgit, their lowest since Feb. 12. Total traded volume stood at 36,123 lots of 25 tonnes, slightly higher than the average 35,000 lots.

Technicals for the next quarter were bearish. Malaysian palm oil is expected to revisit its July 2013 low of 2,137 ringgit per tonne over the next three months, as it has completed a rebound from this level, Reuters market analyst Wang Tao said.

More details:

Friday, 28 March 2014

RM178b Malaysia Palm Oil Revenue By 2020

Can the figures talk!... No doubt we are just interested on technical trend indicators but as general knowledge here is some important fundamental data that may have giving a good understanding about Malaysia palm oil industry at present according to the news in italic font.

Oil palm trees are planted on 5.23 million hectares, or more than 70 per cent, of the country's agricultural land. (what i know...about 19.2m tons CPO was produced in year 2013)

What I have...For your information: Based on MPOB data on CPO yield (tonne/ha) against FFB yield (tonne/ha) is ... in year 2009 it was 3.93 against 19.20.

... fresh fruit bunches to 26 tonnes per hectare by 2020. (whatI don't know...What will be the CPO price with the RM178b revenue stated in the news?)

...smallholders are responsible for 40 per cent of the total oil palm trees planted in the country.

"In Sarawak, there are 18,513 smallholders who have planted oil palm trees on 94,437ha," he added. 

Source: Bernama

(To MH370 families and friends, Be strong, Life must go on.)

Monday, 24 March 2014

Indonesia Palm Oil Output 60 Percent From...

Riau and North Sumatra represent about 60 percent of output, according to Gapki.

Palm oil output in Indonesia, the world’s largest supplier, will probably climb for the first time since September as yields recover from a seasonal decline. (as CPO Futures traders, you must know it)

According to the median of five industry estimates compiled by Bloomberg:
* Production may increase 11 percent to 2.1 million metric tons in March from the previous month.
* Exports expanded 4.4 percent to 1.65 million tons.
* Inventories were unchanged at 2.1 million tons, the survey showed.

Here it means ... February vs March Palm Oil supply and demand in Indonesia in million tons:
Production : 1.89 vs 2.1 up11%
Export : 1.58 vs 1.65 up 4.4%
End stock: 2.1 vs 2.1 - unchange

(As CPO Futures trader, learn to keep such data in your own record can help you learn the fundamentals and may tell you the trend too.)

Source: The Jakarta Globe.