M’sia maintains tax free crude palm oil exports

M’sia maintains tax free crude palm oil exports

Posted on 17 February 2015 - 05:37am

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KUALA LUMPUR: Malaysia has kept tax on exports of crude palm oil at zero for March, a government circular showed yesterday, extending a duty-free policy held since October.

The move, which is likely to underpin prices, comes as a surprise as Malaysia's plantation industries and commodities minister said last week the country was planning to resume taxing exports from March.

The rate was scrapped from October to December, and later extended to end-February.

Malaysia, the world's second largest palm oil producer after Indonesia, calculated a reference price of RM2,232.88 per tonne for March crude palm oil, effectively incurring an export duty of 0%.

Increased global edible oil supplies and slowing demand have pressured palm oil prices which dropped 15% last year.

Authorities in Indonesia and Malaysian, which account for 85% of global palm oil production, are giving financial incentives in a bid to boost demand and support prices of the tropical product.

Indonesia has approved a threefold increase in biodiesel subsidies which is likely to take effect next month. – Reuters

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Analysts neutral on plantation sector even as production dips to lowest level in 47 months

by Jonathan Wong, jonathanwong@theborneopost.com. 

Posted on February 12, 2015, Thursday

KUCHING: Analysts reaffirm their neutral stance on the plantation sector following the Malaysian Palm Oil Board’s (MPOB) announcement of an inventory dip for January 2015 to 1.77 million metric tonnes.

The lower MoM stockpile was largely due to a seasonal decline in production), the lowest in 47 months, intensified by the floods which hit parts of Peninsular Malaysia, Sabah and Sarawak; and a strong domestic consumption, which more than offset weaker exports.

Affin Hwang Investment Bank Bhd (Affin Hwang Capital) was one of the firms maintaining its neutral stance in addition to upholding its estimated CPO price assumptions for 2015 up to 2017.

“CPO futures for the next three months are now trading higher in the RM2,200 to RM2,400 per MT band,” it said in a note to investors yesterday. “With regards to weather, most models now point to a 50 to 60 per cent chance of a weak and short El Niño event ending in early spring.

“We maintain our CPO ASP forecast of RM2,400 per MT for 2015E and RM2,500 per MT for 2016E to 2017E as well as neutral weighting for the plantation sector.”

TA Securities Holdings Bhd (TA Research) expects the CPO price to continue trading within the RM2,200 – RM2,400 per tonne range in 1QCY15.

At this juncture, any potential upside to CPO price will be supply-side driven in its view.

“The recent dry weather in Brazil had already resulted in a downgrade revision in soybean production forecast.

“In Indonesia, the dry weather in 3QCY14 could potentially result in negative lag impact in production in mid of this year. In the meantime, recommendation on Plantation sector remains at neutral.”

Coupled with tight palm oil supply expectation in 1H15 after a relatively good harvest in 2Q-3Q14, researchers at Maybank Investment Bank Bhd (Maybankl IB Research) expects CPO price to make its seasonally recovery in 1Q15.

The good harvest was potentially aggravated by two distinct periods of dryness in 2014 which affected Sumatra, Peninsular Malaysia and Central Kalimantan with a lagged impact on production, it said.

“While the sector call remains neutral, we maintain our view that there is still a short term trading opportunity in 1Q15. This, however, assumes that crude oil (Brent) price bottoms out at US$55 per barrel.”

Read more: http://www.theborneopost.com/2015/02/12/analysts-neutral-on-plantation-sector-even-as-production-dips-to-lowest-level-in-47-months/#ixzz3RUtPD9Xi

Negligible impact from lower palm oil and rubber prices

Negligible impact from lower palm oil and rubber prices

As of Feb 5, CPO settlement prices for April 2015 climbed to RM2,312 per tonne

With both crude palm oil (CPO) and rubber prices trending near record lows, the impact on the economy could be felt soon. Lower CPO and rubber prices could place some added headwind upon the economy, which is already weakened by low crude oil prices.

Despite this, local economists downplay its impact, pointing out that palm oil and rubber exports represent only a small percentage of total exports. Market observers say the decline in commodity prices is not likely to have a lasting effect on the economy. Indonesia and Malaysia supply some 85% of the world’s palm oil.

According to AllianceDBS Research chief economist, Manokaran Mottain, palm oil and rubber exports’ impact is negligible.
“It [impact] is negligible compared to crude oil and other exports as palm oil and rubber represents only 6% of exports. Exports are still supported by liquefied natural gas [LNG] and electronics,” he tells FocusM.

Fears of oversupply and waning demand have driven CPO prices down by 33%. On Aug 29, CPO was hovering at RM1,929 per tonne, the lowest in four-and-a-half years. On March 11 last year, the CPO price reached RM2,917, its highest in recent years.

Despite a price rally in the first quarter of last year, CPO price fell victim to record soybean supply, which pushed soya oil prices lower. Low soya prices historically place some ceiling pressure on CPO prices. Waning demand from China also placed downward pressure on CPO prices where the Chinese market alone represents some 16% of demand for Malaysian palm oil.

Malaysia’s CPO exports from January to November last year totalled RM43.1 bil, marking a rise of 3.1% from 2013

Reference

- See more at: http://www.focusmalaysia.my/Markets/Negligible%20impact%20from%20lower%20palm%20oil%20and%20rubber%20prices#sthash.9TdpD1yg.dpuf

Eksport MALAYSIA 2015 tumbuh 2-3%

KUALA LUMPUR 5 Feb. - Prestasi eksport Malaysia dijangka terus kukuh pada 2015 dengan unjuran pertumbuhan sebanyak dua hingga tiga peratus melalui penekanan kepada pasaran baharu.

Menteri Perdagangan Antarabangsa dan Industri, Datuk Seri Mustapa Mohamed berkata, bagi menghadapi kelembapan pertumbuhan ekonomi dunia dan pertumbuhan yang lebih rendah daripada rakan dagangan tradisional, kerajaan akan memberi fokus pada pasaran baharu seperti Afrika, Asia Tengah dan Amerika Selatan.

“Kita dapat melihat pertumbuhan yang menggalakkan daripada pasaran baharu pada tahun lalu, jadi kita akan memberi fokus pada pasaran baharu dan juga ASEAN yang merupakan pasaran penting. Namun begitu, pasaran tradisional akan terus memainkan peranan penting, cuma negara mahu melihat kepada pasaran baharu,” katanya dalam sidang akhbar Laporan Prestasi Perdagangan Malaysia 2014 di sini hari ini.

Beliau berkata demikian ketika ditanya bagaimana Malaysia akan mengekalkan pertumbuhan perdagangan memandangkan rakan dagangan utama seperti China, Eropah dan Amerika Syarikat (AS) menjangkakan pertumbuhan dagangan yang lebih rendah pada tahun ini.

Sementara itu, Mustapa memberitahu, pertumbuhan eksport Malaysia yang kukuh dan melepasi jangkaan telah menyokong perdagangan Malaysia pada 2014 dengan kenaikan sebanyak 5.9 peratus kepada RM1.45 trilion, berbanding RM1.37 trilion tahun sebelumnya. Pertumbuhan perdagangan negara bagi 2014 diunjur 5.2 peratus.

Katanya, eksport meningkat sebanyak 6.4 peratus atau RM46.14 bilion kepada RM766.13 bilion, melepasi unjuran enam peratus dalam Laporan Ekonomi 2014/2015, manakala import meningkat seba-nyak 5.3 peratus atau RM34.32 bilion kepada RM683.02 bilion.

“Pertumbuhan eksport yang kukuh menghasilkan lebihan dagangan sebanyak RM83.11 bilion yang merupakan lebihan dagangan tahun ke-17 berturut-turut dicatatkan. Lebihan dagangan 2014 mencatatkan pertumbuhan dua digit iaitu sebanyak 16.6 peratus, satu pencapaian yang memberangsangkan berbanding dengan senario pertumbuhan pada 2012 dan 2013,” ujarnya.

Jelasnya, rakan dagang utama yang menyumbang kepada pertumbuhan dalam perdagangan ialah negara-negara ASEAN yang berkembang sebanyak RM14.54 bi-lion atau 3.9 peratus, diikuti Kesa-tuan Eropah (EU) sebanyak RM8.35 bilion atau 6.2 peratus, AS (RM8.01 bilion atau 7.4 peratus), Australia (RM7.48 bilion atau 16.4 peratus), Hong Kong (RM6.05 bilion atau 14.5 peratus), Taiwan (RM5.94 bi-lion atau 11.2 peratus) dan China (RM4.54 bilion atau 2.2 peratus).

Tambah beliau, peningkatan eksport didorong oleh permintaan yang lebih tinggi untuk produk pembuatan, terutamanya barangan elektrik dan elektronik (E&E) dan permintaan kukuh bagi komoditi.

“Dengan pengecualian komoditi eksport seperti minyak sawit dan getah, eksport lain ke China terus kekal.

rujukan

- See more at: http://www.utusan.com.my/bisnes/ekonomi/eksport-2015-tumbuh-2-3-

Mustapa Mohamed

Plantation Industries and Commodities Minister: Invent machine tools suitable for country's landscape

Invent machine tools suitable for country's landscape

Daily Express :Published on: Wednesday, November 26, 2014

PUTRAJAYA: The future machine tools and methods to be developed for the oil palm industry should be more adaptable to soil conditions and terrain, comfortable, safe, use green energy and semi-automatic to attract more locals to work in the plantations.

Plantation Industries and Commodities Minister, Datuk Seri Douglas Uggah Embas, said the machines should be built to accommodate the narrow terraces and difficult terrain common to Malaysia's landscape.

"The current mechanisation system needs to be further advanced to meet the future challenges.

"I believe that the harvesting tool and fruit evacuation techniques to be developed soon will probably be robotic in nature that will achieve optimum output and capitalise on advanced materials and technology," he said.

Uggah said this in his address at the Oil Palm Mechanisation 2014 seminar in Bangi near here Tuesday.

The text of his speech was read by Malaysian Palm Oil Board (MPOB) director-general Datuk Dr Choo Yuen May.

He said failure to fully implement mechanisation in the plantation industry was mainly due to the non-systematic and non-concentrated approach of looking at the problems in totality and in a multi-disciplinary manner.

"The advances in field mechanisation are also hindered by the non-availability of suitable prime movers to suit the local terrain," he said.

The minister said the MPOB has made breakthroughs in developing farm machineries that were being used by the plantations with the establishment of the Farm Mechanisation Centre.

The MPOB's efforts in inventing and developing farm machineries had so far resulted in the development of over 35 technologies and several of them had already been commercialised, he said.

Uggah said the palm oil industry was still dependent on labour, particularly in the estates, despite the improvements and availability of machineries.

As of September this year, the total workforce in the oil palm plantations was 451,728 workers, of which foreigners made up 352,970, mostly working as harvesting and fruit evacuation operators, he said. – Bernama

Bernama: Plantation Industry Needs To Adopt Greater Mechanisation As Way Forward

Plantation Industry Needs To Adopt Greater Mechanisation As Way Forward

KUCHING, Nov 24 (Bernama) -- About 350,000 workers or 78 per cent of the workforce in the plantation sector nationwide are foreigners, says Plantation Industries and Commodities Minister Datuk Douglas Uggah Embas.

Given the lack of interest among locals to work in the plantation sector, and the government's drive to reduce dependency on foreign workers, he said the way forward for the plantation industry was to undertake greater mechanisation and automation.

He said with greater uptake and adoption of mechanisation, the plantation industry needed to restructure its operations as it would then employ fewer low-skilled workers, and required more high-skilled workers to operate the machinery.

"While I am optimistic that the mechanisation and automation will greatly help reduce the dependency on foreign labour, it has to go in tandem with a well-planned and coordinated programme, as well as strong commitment by the management of plantation and industries to improve productivity of their workers," added Uggah.

He said this in a speech read by the ministry's secretary-general, Datuk Himmat Singh at the opening of the 4th International Plantation Industry Conference and Exhibition (IPiCEX2014) here, Monday.

Uggah said the plantation sector in Malaysia had evolved from merely producing and exporting primary raw materials to producing the semi-processed, processed and finished product, generating more value-added products to meet the growing world demand.

He said presently, Malaysia's commodity-based products were exported to more than 200 countries over the world, contributing to more than RM141 billion in export earnings in 2011.

"To progress further, the sector has to move up the value-chain by venturing into the production of high value-added products, and in this regard, the players are encouraged to adopt new technologies, undertake innovations and enhance commercialisation of research and development efforts," he noted.

"With such efforts, it is strongly believed that the target of achieving RM242.6 billion in export earnings from commodity-based products by 2020 as envisaged in the National Commodity Policy can be realised," said Uggah.

He noted that the palm oil sub-sector was one of the key sectors targeted to contribute towards economic transformation in the nation into a high income country by 2020.

He said the palm oil industry in Malaysia currently covered a planted area of about 5.3 million hectares representing 16.6 per cent of total land use in the country, with total exports in 2013 valued at RM63.2 billion.

-- BERNAMA

CONGRATULATIONS…..Sabah-based TSH now the lowest cost CPO producer

Published on: Daily express..Sunday, November 23, 2014

KUALA LUMPUR: Sabah-based TSH Resources Bhd is now the country's most efficient oil palm planter, and possibly, among the best in the region.

Its estates in Sabah currently hold a track record of average fresh fruit bunches (FFB) yield at 30 tonnes per hectare from 2011 to 2013, much higher than the industry's FFB average of 19 tonnes per ha, which has remained stagnant for over a decade. The 17-year old plantation company started from cocoa, to be the lowest cost producer of Crude Palm Oil in the country.

Given its three-year CPO average costs of production at RM830 per tonne, TSH Resources has easily overtaken other well experienced plantation big boys such as Kuala Lumpur Kepong Bhd, IOI Corp Bhd and United Plantations Bhd, according to plantation analysts.

On average, the cost of production among oil palm planters in Peninsula Malaysia is about RM1,200 to RM1,300 per tonne while in Sabah and Sarawak, it varies between RM1,200 and RM1,500 per tonne.

According to TSH Resources Chairman Datuk Kelvin Tan Aik Pen, there is no magic formula to TSH Resources' success in attaining a high FFB yield in a cost-efficient environment, the two key benchmarks closely monitored by plantation players.

"What we have is just sheer hard work and the ongoing desire to continuously push down our production costs. "Moving forward, TSH Resources wants to step up on its current FFB yield and manage cost control efficiently."

He says that TSH Resources is also thankful for having the foresight to invest in the superior planting material – Wakuba – some 11 years ago.

"Our Wakuba high-yielding ramets will help to spur further growth in our yield per ha to a significantly higher level than the industry's average in the coming years."

Hence, Tan expects TSH Resources' potential FFB yield can be increased to about 35 tonnes per ha within the next five to seven years as 82pc of our plantations comprising immature and young immature trees are progressing well into higher yield age particularly in our estate in Kalimantan."

The higher FFB yield going forward will also help to bring down the company's production costs, says Tan adding that its FFB production grew 26pc to 164,000 tonnes in the third quarter of 2014 from 129,778 tonnes in the same quarter last year.

He also envisages that TSH Resources' CPO production costs (ex-estate, excluding kernel) can come down further to about RM700 per tonne of CPO within the next five years.

TSH Resources currently has landbank consisting 65,000ha of unplanted areas as well as 50,000ha of planted areas.

According to Tan, TSH Resources is fully committed to undertake new planting activities between 4,000ha and 5,000ha annually.

In 2013, the group planted 4,200ha inclusive of those under the Plasma Development Programme in Kalimantan.

"We will also be on the look out for greenfield land either in Sabah and Kalimantan and acquire them if the opportunity arises," he adds.

Within the next five years, he also hopes the company's promising growth will significantly enhance the market capitalisation from the current RM3bil.

"We will be very comfortable once we have grown into a sizeable plantation outfit but still focus on being a highyield and low cost producer of CPO," Tan said.

The group posted at 16.2pc jump in core operating profit from RM40.1mil for the third quarter from RM34.5mil a year earlier. Revenue rose to 12pc to RM246.9mil from RM220.5mil bringing the current year to date revenue to RM835.9mil.

HLIB Research in its latest report has a "hold" recommendation of the stock, saying that it continues to like TSH Resources for its young tree profile which indicates strong FFB output growth going forward.

However, the research unit sees limited upside potential to its share price given the weak CPO price sentiment as TSH Resources' earnings have relatively high sensitivity to CPO price changes.

The positive side to TSH Resources includes its strong FFB output growth, stable cash flow from its alternative powe plant and favourable long term outlook in the palm oil business.

Kenanga Research says the good results of TSH Resources are mainly driven by stronger FFB production growth which offsets the weak CPO selling prices.