Good Nursery and Fertiliser

Good Nursery and Fertiliser  essential for sustainable oil palm production.

5 years After Field Planting

This is Borneo Samudera seedling that I bought from Sabah in april 2007. At that time the germinated seed cost only RM1.35. I planted it  in my nursery myself following MPOB guideline. 

The problem face by most of smallholders are availability of cheap labour. 

19th After Field Planting

My oil palm growing well and start fruiting, 19 months after field planting.

Premium White Edible Nest From Borneo Cave

High price edible nest from Baram Cave, in Miri, Sarawak.

Good year for Oil Palm in 2014

It was a year of two halves for the listed commodity traders and palm oil plantation firms. But while the light at the end of the tunnel remains unclear for mid-stream traders, plantation stocks are set to ride on rising crude palm oil prices.

Even as the benchmark Straits Times Index (STI) climbed upwards in the first half of 2013, shares for the largest commodity trading firms in Asia - Noble Group, Olam International and Wilmar International - slumped.

Only in September did more upbeat market sentiments and a recovery in the prices of some commodities such as sugar, together with positive third-quarter results at Noble and Wilmar, give a boost to their share prices.

Still, Noble will end the year as one of the worst performers on the STI for the third year running, its price having fallen 8.23 per cent this year compared to the STI which dropped by a smaller 0.55 per cent.

"The mid-stream trading companies have performed poorly for most of this year as they had to deal with challenges related to past diversification investments. Noble's and Olam's results have been especially volatile," said Macquarie analyst Conrad Werner.

Noble had invested in Brazilian sugar mills in 2010, which returned to the black only in the latest quarter.

Olam has trimmed its capital expenditure and is looking to sell stakes in some of its assets to release cash from its balance sheet.

The muted economic outlook in the first half of the year also kept investors away from them, said OCBC Investment Research analyst Carey Wong.

But with a US economy on stronger footing, investors could adopt a more "risk on" approach, he opined, upgrading his call on the sector to "neutral" from "underweight".

"With the valuations of some of the commodity plays still looking relatively inexpensive, we could see potential upgrades for some of them if there is an over-correction in the market," he said.

Of the three stocks, Wilmar is by analysts' consensus the top pick.

Soybean crushing margins in China, which dragged down the group's performance in the past two years, are stabilising, and the current low crude palm oil prices will also benefit Wilmar, said Maybank Kim Eng analyst Wei Bin.

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Phillip Securities analyst Nicholas Ong also chose Wilmar for its exposure to emerging markets, such as China, India and South- east Asia, and resilient vertically integrated business model. The stock is a good proxy for the growing food demand in Asia, he said.

But Macquarie's Mr Werner cautioned that next year is likely to be a tough year again for the three traders.

"We will have an over- capacity issue in agricultural products. Because they're more exposed to the processing and upstream side than in the past, lower prices affect them more," he said.

It will also be "a slow arduous process" for the firms to demonstrate that they can consistently manage their assets better, and bring up their returns to equity, he added. "For Noble and Olam, they should be getting mid-teens returns. They're around the 10 per cent mark right now."

In the palm oil sector, Golden Agri-Resources also joined Noble in the ranks of the worst performing stocks on the STI this year, with its price down 16.9 per cent.

Share prices for palm plantation firms such as Golden Agri, First Resources and IndoFood Agri had similarly fallen before picking up in the second half, following the trajectory of crude palm oil prices.

Analysts are positive on the sector, on expectations that higher biodiesel mandates in Indonesia and lower palm oil inventories will lift crude palm oil prices next year. CIMB and Citi Research forecast that crude palm oil will hit RM2,700 (S$1,040) per tonne next year, up 12.5 per cent from the average this year.

But this will be capped by rising supplies of oilseeds such as sunflower and soy oil, and lower demand for biodiesel in the US and Europe, said CIMB.

Rabobank also warned that the implementation of biodiesel programmes in Indonesia and Malaysia remains uncertain.

"Undoubtedly, biodiesel programmes are among the strongest bullish driver for palm prices in 2014, but delays in implementing these mandates and a decline in crude oil prices could dampen the impact of these programmes and reduce bullishness," it said in its outlook for agri-commodity markets in 2014. The bank is neutral on palm oil prices.

Palm Oil Climbs in Malaysia as Crude Gains on U.S. Supply Drop

Palm oil advanced on speculation that a rally in crude oil prices to the highest level in more than two months will boost demand for the vegetable oil as feedstock for biofuels.

The contract for March delivery rose as much as 0.7 percent to 2,649 ringgit ($804) a metric ton on the Bursa Malaysia Derivatives and ended the morning session at 2,641 ringgit. Futures increased 8.3 percent this year, set for the first annual gain since 2010.

Palm entered a bull market in November as output fell at plantations in Indonesia, the biggest supplier, and biodiesel demand increased. Prices may climb to 3,000 ringgit by March as demand increases for the commodity used in food and fuel, according to Dorab Mistry, director at Godrej International Ltd.

“When crude oil prices increase it makes it more profitable to produce biodiesel from palm,” said Alan Lim Seong Chun, an analyst at Kenanga Investment Bank.

West Texas Intermediate crude oil traded above $100 a barrel for a second day after government data showed U.S. crude stockpiles fell more than expected to the lowest level since September. Futures were at $100.28, near the highest settlement since Oct. 18.

Soybean oil for March delivery was little changed at 39.33 cents a pound on the Chicago Board of Trade. Soybeans fell 0.3 percent to $13.1075 a bushel.

Refined palm oil for May delivery gained 0.4 percent to 6,074 yuan ($1,001) a ton on the Dalian Commodity Exchange. Soybean oilwas little changed at 6,924 yuan.

To contact the reporter on this story: Pratik Parija in New Delhi atpparija@bloomberg.net

To contact the editor responsible for this story: James Poole atjpoole4@bloomberg.net

Palm oil climbs most in two weeks

Palm advanced the most in almost two weeks on speculation that an increase in crude oil prices to the highest level in more than a month will boost demand for the tropical oil in biodiesel as production declines in Indonesia.

The contract for February delivery rose 1.5 per cent to RM2,656 a metric tonne on the Bursa Malaysia Derivatives, the biggest gain for most-active futures since November 21. Futures advanced 8.9 per cent in 2013.

Palm oil, used in everything from candy to detergents, entered a bull market last month and is heading for its first annual gain in three years as production drops at plantations in Indonesia and biodiesel demand increases. Output in Indonesia, the biggest producer, will decline by 500,000 tonnes to 27.5 million tonnes this year, Dorab Mistry, director at Godrej International Ltd, said on November 29. That’s the first drop since 1998, according to US Department of Agriculture data.

"Higher crude oil prices will mean increased usage of palm in biodiesel," said Ivy Ng, an analyst at CIMB Investment Bank Bhd, by phone from Kuala Lumpur. "Palm has generally trended down in the last few days and we are seeing some bargain buying because there are expectations that prices will rise as we head into the lower production months."

West Texas Intermediate crude oil climbed as much as 1.6 per cent to US$97.53 per barrel, the highest level since October 30, as US inventories shrank. Palm prices were also boosted by gains in soybeans, said Ng.

Soybean oil for January delivery advanced 0.7 per cent to 40.37 cents a pound on the Chicago Board of Trade. Soybeans climbed 0.2 per cent to US$13.225 a bushel.

Refined palm oil for May delivery gained 0.4 per cent to close at 6,252 yuan (US$1,026) a tonne on the Dalian Commodity Exchange. Soybean oil ended little changed at 7,262 yuan.-- Bloomberg

Read more: Palm oil climbs most in two weeks http://www.btimes.com.my/Current_News/BTIMES/articles/20131204131715/Article/index_html#ixzz2olEhScx8