2011 CPO prices to average RM3,600 per tonne

Posted on January 19, 2011, Wednesday

KUCHING: The president of Asian Agri Group, Datuk Yeo How recently gave his views on the plantation sector with a bullish outlook on crude palm oil (CPO) prices. In its research report, Hong Leong Investment Bank Bhd (Hong Leong Research) said that the mooted CPO average price was RM3,600 per tonne. For that matter, the research house said Yeo believed that CPO prices had the potential of rallying beyond the RM4,000 per tonne mark in the near term, albeit with greater price volatility relative to 2010. 

This view was underpinned by the record-low inventory levels for several major oilseeds and grains largely due to adverse weather conditions. To elaborate further, the oilseeds and grains in question were soybean, sunflower oil and CPO. While the weak corn and soybean crop would have already been factored into the current high prices, Yeo believed that prices of soybean would soar higher should soybean crops come below expectations and hence result in higher CPO prices. Nevertheless, beyond the first half of this year, while Yeo believed that CPO output would recover from the second half of this year onwards, it was important to note that the quantum of the crop recovery re-mained questionable and this would not soften CPO prices should crop recovery be weak.

In other developments, Hong Leong Research said Yeo’s views also included both demand and prices to likely strengthen post Chinese New Year as China would likely begin inventory replenishing given the low inventory level and as the industry started to move away from seasonally weak demand during the winter months.

While there were concerns that skyrocketing commodity prices might result in demand rationing for CPO, Yeo believed that this was unlikely to happen at this juncture given that prices of other oilseeds had increased substantially as well. Notably, the research firm also highlighted Yeo’s views that the current high commodity prices were also supported by the flush of liquidity and the weak US dollar.

Furthermore, it also presented Yeo’s beliefs that margins for the refining business would remain tight amidst the current high CPO prices for the downstream segment. On the issue of biodiesel viability, Yeo said mandates from various countries should help cushion biodiesel consumption although it was currently not economically viable on a free market basis.

There were also risks present in the form of global vegetable oils (including CPO) production coming in higher than expected, which would result in lower-than-expected CPO prices and also demand rationing by certain oil-consuming countries. The effects of this would be apparent when vegetable oil prices skyrocket to certain levels, which would bring down consumption for vegetable oil. 

Hong Leong Research noted that there was still plenty of upside to plantation stocks at the current share price levels as those under its coverage were still trading below two-year historical forward price-to-earnings mean. Its top picks on the sector were IOI Corporation Bhd, Sime Darby Bhd and Tradewinds Plantation Bhd with target prices at RM6.62 per share, RM10.76 per share and RM4.60 per share respectively.

Bilangan Dan Berat Buah Tandan Kelapa Sawit

10 - 12 buah tandan boleh dihasilkan oleh pokok matang kelapa sawit setahun . Setiap pokok matang akan menghasilkan buah berat 20 kg sebulan.  Oleh itu setiap pokok hasilkan 10 x 20 = 200 kg x .50 = RM 100. (Jika harga kilang RM500/tan) .Tanam 1000 pokok = RM100,000.00. Untuk menjana pendapatan 1 juta setahun kenalah menanam 10,000 sawit / 148 = 68 ha.

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Monday May 31, 2010

Shortage of oil palm seedlings

By JACK WONG
jackwong@thestar.com.my

Demand set to rise as Sarawak steps up development of oil palm plantations

KUCHING: Sarawak, which is facing a shortage of oil palm seedlings, is expected to see rising demand as the state has yet to develop a quarter of its target of one million hectares of oil palm plantations, said State Assistant Minister in the Chief Minister’s Department Naroden Majais.

He told an oil palm seedling entrepreneurship course here recently that Sarawak needed 16.4 million seedlings last year but the supply only amounted to 10 million.

Juara Beetuah Sdn Bhd managing director Michael James attributed the shortage in Sarawak, especially over the past two years, mainly to exports of oil palm seedlings to Kalimantan, Indonesia.

He said such sales had however abated as the Indonesian plantations, most of which were owned by Malaysian firms, had started their own nurseries.

Juara Beetuah, a major seedling producer and the only company in Sarawak awarded the competency certificate by Malaysian Palm Oil Board (MPOB), owns nurseries in Lundu (Kuching Division), Bintulu and Lawas in northern Sarawak.

Some EU MPs on a visit to Malaysia say the sector has helped take people out of poverty

James said his company produced up to 100,000 seedlings a year, which were mainly supplied to MPOB. The latter then distributes them to smallholders

Juara Beetuah’s other customers are government agencies like Sarawak Land Consolidation and Rehabilitation Authority and Felda, which are involved in plantation projects.

“We produce based on advance contracts. On top of that, we produce another 10% for the market,” he told StarBiz.

Juara Beetuah uses high-yield clones that are able to produce between 28 and 33 tonnes of fresh fruit bunches per hectare a year.

However, James said the output would depend on several factors such as soil conditions and plantation management methods.

The company sells seedlings for RM8 to RM12 each, depending on transportation costs.

Sarawak needs more oil palm seedlings

By SHARON LING

KUCHING: Sarawak needs to produce more oil palm seedlings to meet a shortage faced by plantations in the state. Assistant Minister in the Chief Minister's Department Naroden Majais said the state was short of some 6mil seedlings last year.

"We required 16.4mil seedlings last year but were only able to supply 10mil seedlings. Each new hectare of oil palm requires about 200 seedlings," he said. He added that demand for seedlings would continue to rise because Sarawak was targeting 1mil ha of oil palm plantations, out of which 250,000ha have yet to be developed.

"The land has already been identified and we will develop it in stages. This will require more seedlings, while existing plantations will also need seedlings to replace their older trees. "So there is a big opportunity for local entrepreneurs to produce seedlings on a commercial basis," he said when opening an oil palm seedling entrepreneurship course here Tuesday.

The two-day course, organised by the Bumiputera Entrepreneurship Development Unit in the Chief Minister's Department and the Malaysian Palm Oil Board (MPOB), was attended by 45 participants. The unit's adviser Datuk Adzmy Abdullah estimated that Sarawak would need 500ha of nurseries to supply the targeted 1mil ha of oil palm plantations. He said there were currently 130 entrepreneurs in the state cultivating oil palm seedlings but more were needed to meet current and future demand. "For example, there are only four certified nurseries in Mukah supplying 20,000ha of plantations," he said.

He also said cultivating seedlings was a potentially lucrative industry as the production cost was about RM5 per seedling compared to a selling price of RM10 to RM15 for a year-old seedling. On the course, Adzmy said, the participants would sit for theory and practical tests at the end. Those who passed will receive the Oil Palm Nursery Certificate of Competency from MPOB.

Smallholders can help boost palm oil yield

By Rupa Damodaran

The Malaysian palm oil industry can improve its current productivity of four tonnes oil yield per hectare by improving on the productivity of smallholders, says Plantation Industries and Commodities Minister Tan Sri Bernard Dompok. "Smallholders productivity can be enhanced through new technology and good agricultural practices," he said at the launch of the International Palm Oil Sustainability Conference 2010 in Kota Kinabalu, Sabah, yesterday.

Oil palm smallholders who include those under Felda, Risda and Felcra are expected to raise their current level of below 3.5 tonnes to 4.0 tonnes by 2014, with the support of the replanting scheme by the government to replace old low-yielding trees. Dompok said the current productivity is about 20 per cent of its theoretical potential oil yield of about 17 to 18 tonnes per hectare.

Malaysia, the second largest producer and major exporter of palm oil, last year produced 17.56 million tonnes of palm oil and exported close to 15.87 million tonnes..The total revenue generated from the exports of palm oil and its products in 2009 was valued at RM49.59 billion, or 7.5 of the country's gross domestic product.

Dompok said the world today has a fair and substantial quantity of RSPO certified and sustainable palm oil from producer nations including Malaysia. However, the uptake of Certified Sustainable Palm Oil has been extremely slow. Although research has proven that palm oil is the better oil, there are moves to label palm oil in food products. These include the proposal to the Australian Senate to label palm oil products in isolation from other food products and linking it to issues such as deforestation and the endangerment of the orang utan.

"This proposal has the consequence to disadvantage palm oil and impede trade and consumption of this nutritional product," he said.

Dompok said for every hectare of oil palm, Malaysia preserves four hectrae of permanent forest, which is a very healthy balance in terms of land use policy. Meanwhile, Malaysian Palm Oil Council (MPOC) chairman Datuk Lee Yeow Chor, commenting on the European Union's recent statement that 90 per cent of Malaysia's palm oil exports will not be affected by the Renewable Energy Directive, said:

"For us, even the remaining 10 per cent is of concern ... we want to correct the misconception that affect the demand of our palm oil."

Lee said the MPOC is well-geared to tackle issues such as the blame for loss of wildlife habitat and biodiversity. The RM20 million Malaysian Palm Oil Wildlife Conservation Fund has enabled the survey of orang utan population in Sabah together with the Sabah Wildlife and the Borneo Conservation Trust and Hutan NGOs. Yesterday, MPOC signed a memorandum of understanding with the Sabah Wildlife Department and Shangri-Rasa Ria Resort for the funding and launch of the Sabah Wildlife Rescue and Care Centre.

Read more: Smallholders can help boost palm oil yield http://www.btimes.com.my/

Minister: New devt model to benefit NCR land owners

Borneo Post 

August 20, 2010, Friday

KUCHING: The Ministry of Land Development will come up with a new mechanism to develop Native Customary Rights (NCR) land to bring greater benefits to its owners. Minister of Land Development Dato Sri Dr James Jemut Masing said NCR land totalled some 1.5 million hectares in the state but the majority of its owners remained poor. “We will continue to develop NCR land, but my officers will come up with new mechanisms to review how this land could be developed. “You must understand that our NCR landowners continue to be the poorest of the poor in Sarawak. “The objective of the government to develop the NCR land has always been to eradicate poverty,” Masing told reporters at his residence here yesterday.

Two years old Oil Palm grows well in one of the NCR land belongs to small holder

He said under the new mechanism, both the federal and the state governments would provide financial assistance to the stakeholders to develop the NCR land. “Under the present land concept, the NCR landowners have 30 per cent stake, the developers would get 60 per cent and the remaining 10 per cent owned by Pelita (Land Consolidation Development Authority). “But we have seen from 1996 most of these land owners remain very poor because the profit is used to pay back the loans which could be as high as eight per cent per annum,” he said. “The concept would be similar to Felda and Felcra so that NCR land owners will get the maximum benefit, with almost zero interest to be paid back to the government,” he explained.

Masing said the government had targeted to develop some two million hectares of land, most of which would be NCR land, by 2015.

Currently, some 850,000 hectares of land had been planted with oil palm. He said besides oil palm, his ministry would also be focusing on rubber and other cash crops. “But most of the land will be planted with oil palm. This is because there is no more land left in the peninsular and Sabah to increase the acreage of the crop,” he said, adding that the crop would be planted in mini estates with the size of between 200-500 acres.

Masing said one of the challenges of the palm oil industry was its regimented nature. “As such rubber is better. For instance, we don’t have to tap it if it’s raining. Unlike oil palm, we have to harvest it regardless of the weather condition,” he explained. He also explained that his ministry would also have to identify suitable crops for certain terrain.

Govt takes steps to help smallholders up oil palm yield

May 25, 2010, Tuesday

KOTA KINABALU: The government is placing emphasis on enhancing smallholders’ productivity through the adoption of better planting materials, automation, mechanisation and good agriculture practice.

Tan Sri Bernard Dompok

Smallholders, who account for 40 per cent of the crude palm oil produced in the country, at present, only manage to yield an average of between 2.5 and 3 tons of oil per hectare per year. “The industry average is about four tons and we want the smallholders to catch up to this level. The average can even go up to between six and seven tons in the future.

S“There are 300,000 smallholders in the country and we have to see how they can benefit from the experience of bigger plantation companies,” said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok at a press conference after opening the International Palm Oil Sustainability Conference here yesterday.



It is important for smallholders to step up production as the Roundtable on Sustainable Palm Oil (RSPO) initiatives, now limited to big plantation companies, would be ultimately extended to smallholders.



RSPO would be introducing a certification scheme for smallholders and is doing whatever possible for the smallholders to be certified. As it is aimed to help the industry, the smallholders standard would not be the same as that for big producers.

On the impact of the lobby mounted against palm oil in Europe, Dompok said it had not affected offtake from Malaysia as crude palm oil stocks now stood at only 1.6 million against a high of two million tons recorded a year ago. “This is a good sign that exports are on the uptake”, he said, adding that Malaysia was still looking at all avenues of hope, including taking up the issue with the World Trade Organisation (WTO).


Meanwhile, the Malaysian Palm Oil Council chief executive officer Tan Sri Dr Yusof Basiron said the industry was supporting the initiatives of the RSPO but other countries were also embarking on their own certification requirements. “Germany wants to have its own and the United States is trying to come up with a certification programme, so where is this going to end?” he asked.

He said Malaysia was still thinking of the best approach to harmonise and unify into some kind of sustainability standards, perhaps, at a national level in order to be able to respond to the regulatory mandatory certification that the European Union and United States were trying to put in place.



Dr Yusof said both countries were trying to put in their own version, bypassing even the RSPO, and this was very troublesome for the producers who have to handle three or four certification schemes. “This is beyond the affordability of smallholders as well,” he added. —