Friday, November 30, 2012

20121130 1705 Palm Oil Related News.

INTERVIEW-Indonesia's SMART sees 2013 palm oil output rising by up to 10 pct GAGR.SI SMAR.JK - RTRS
30-Nov-2012 16:48
SMART output seen up 5-10 percent in 2013 due to tree maturity Indonesia ports struggle to cope with weather, demand fluctuations Indonesia's palm stock levels at more than 4 million tonnes
By Michael Taylor
NUSA DUA, Indonesia, Nov 30 (Reuters) - Indonesia's biggest palm oil producer SMART SMAR.JK expects its 2013 output to rise by as much as 10 percent on the year to around 2.4 million tonnes as more plantations mature, a company executive said on Friday.
SMART, or PT Sinar Mas Agro Resources & Technology, is likely to produce about 2.2 million tonnes of palm oil this year, Susanto, chief executive of the company's West Kalimantan operations, told Reuters.
"For next year, hopefully there will be an increase of 5-10 percent," Susanto said on the sidelines of the 8th Annual Indonesian Palm Oil Conference.
"We have new areas and more mature areas, especially in Central Kalimantan," he added.
SMART runs the Indonesia palm oil operations of its Singapore-listed parent Golden Agri-Resources GAGR.SI.
The company had earlier estimated output to rise by about 8 percent a year over the next five years. (Full Story)
Susanto manages 30,000 hectares of palm plantations in West Kalimantan, producing 40,000-45,000 tonnes this year. He said that volume is likely to rise 10-15 percent in 2013.
Malaysia and Indonesia account for about 90 percent of the world's annual palm oil production of about 45 million tonnes.
This year, Europe's financial woes coupled with an economic slowdown in top buyers India and China, have cut demand for the edible oil and pushed inventories in second-largest producer Malaysia to record highs. (Full Story)
The rising stocks have shaved a quarter off the value of palm oil futures FCPOc3 this year, and many analysts at the conference see little let-up in early 2013.

Palm oil stocks in Indonesia, the world's top producer, are more than 4 million tonnes at present and capacity is between 5-6 million tonnes, said Joelianto, trading director at SMART.
To offset falling demand, government officials in Indonesia have called on the palm industry to build bigger storage capacity, and increase domestic use of biofuels.
Joelianto, however, said the biggest challenge to the industry in Indonesia was the lack of bigger waterways and new ports to quickly ship out palm oil and ease high stock levels.
"The government has not done anything concrete yet," said Joelianto, adding that many palm firms were now building their own jetties. "We need more infrastructure, especially deeper ports that can handle bigger volumes."
Earlier this month, the Indonesian Vegetable Oil Association said modernising Indonesia's state-owned ports was crucial to handle the rapidly expanding refined palm oil output. (Full Story)
Crude palm oil shipments were also affected by dry weather conditions and falling water levels on a river in West Kalimantan in June. (Full Story)
"If Indonesia's palm oil (output) is growing by 2-2.5 million tonnes per year, we must have ports that can handle that kind of volume," Joelianto said.

Palm oil prices set for a volatile 2013 in oversupplied market
Fri Nov 30, 2012 1:17am EST
* Record palm oil stocks to weigh on 2013 prices
* Renewable energy demand may mop up excess stocks
* China's tighter food quality rules, India protectionism worrying
* Tighter soybeans may be a bright spot for palm oil -Mielke
By Niluksi Koswanage and Michael Taylor
NUSA DUA, Indonesia Nov 30 (Reuters) - Palm oil prices are set to start 2013 on a sour note as record high stocks and rising output in Southeast Asia overwhelm already weak demand, while regulatory uncertainty in top buyers India and China adds to the gloomy outlook.
Analysts and traders at an industry meeting in Bali expect the world's biggest palm oil producers, Indonesia and Malaysia, to boost supplies next year, barring any weather disruptions.
An increase in the amount of edible oil on the global market is likely to further weigh on benchmark Malaysian futures <0>, which are set to post their worst annual performance this year since the 2008 financial crisis. The profits of big palm oil firms, such as Singapore's Wilmar and Malaysia's Sime Darby, are also likely to be eroded.
While lower prices will attract food demand, appetite could be curbed by possible regulations by China and India. India, the world's biggest buyer, may set higher taxes on edible oil imports to protect oilseed farmers, and China launches strict quality curbs for imports on Jan. 1.
"I am steadily coming to the conclusion that the days of supernormal profits in palm oil cultivation are coming to a close," influential palm oil market analyst Dorab Mistry said.
"Overall I expect vegetable oil prices to remain rangebound in the first half of the year and to begin a major bear market in the second half," he told the conference.
Mistry, who handles the edible oil trading portfolio for India's Godrej Industries, forecast palm oil to "break down" if India hiked import taxes.
Otherwise, palm oil futures will trade between 2,300 and 2,600 ringgit between now and February 2013, as high stocks more than make up for strong Asian demand growth, he said.
Other analysts and traders surveyed by Reuters at the meet also saw palm oil prices averaging 2,500 ringgit next year, or 17 percent off this year's average of 3,016 ringgit.

Palm oil is now trading at above 2,350 ringgit, sharply lower than year-ago levels of above 3,000 ringgit.
Prices next year will be affected by the performance of benchmark Brent crude oil and the Chinese quality requirements, said James Fry, chairman of consultancy LMC International.
"There are three possible outcomes," he said, referring to the Chinese curbs. "More crude palm oil or crude olein imports for refining, more polishing of RBD olein imports and maybe more fractionation of RBD palm oil imports."
Higher crude prices could boost the appeal of Asian palm oil, and shrink Malaysian inventories to 1.8 million tonnes by June 2013 from a record 2.5 million in October, Fry said.
Palm futures are unlikely to change too much from current levels if Brent futures fall to around $90 a barrel, he added. If Brent stays at around $110, palm oil could hit 2,950 ringgit.
Palm oil demand has fallen this year, crimped by financial woes in Europe and economic slowdown in China.
Next year, producers will also have to contend with even higher supplies from both Malaysia and Indonesia, which makes for a challenging market unless the global economy picks up.
Mistry, in his first estimate of Indonesian output, forecast production to rise to 29.5 million to 30 million tonnes in 2013 from a projected 27.5 million this year, exceeding estimates by the official industry association GAPKI.
He also forecast Malaysian output growing at a slower pace, to 19 million tonnes next year, from an estimated 18.4 million this year.
Not all analysts, however, rue the increase in supply.
Thomas Mielke, editor of Hamburg-based research house Oil World, believes the increase in palm oil supply will help fill the gap left by a decline in soybean production in the Americas.
He forecast crude palm oil prices, now trading at a record $350 discount to soybean oil, would start rising as more customers make the switch.
"Global soybean supplies are tight," he said. "I expect that palm oil futures will appreciate to 3,100 to 3,200 Malaysian ringgit sometime in March, April, May 2013."
Indonesia's rapidly expanding edible oil processing industry is also likely to help soak up the extra output.
Indonesia's Palm Oil Board forecast total palm oil consumption to rise to about 7.5 million tonnes next year, from an expected 7 million this year.
Jakarta is also considering increasing tax incentives to encourage palm oil companies to set up refineries, a government adviser said, as it develops its downstream sector to compete with Malaysia and draw in more export earnings. (Editing by Miral Fahmy)

VEGOILS-Palm oil slips on investor caution, set for third monthly loss
Fri Nov 30, 2012 1:06am EST
* Prices need to trade at 2,200 ringgit level for next 4-6
weeks -Mistry
    * Palm oil still eyes 2,353 ringgit - technicals
    * Malaysia's November palm exports up 3.9 pct -ITS
    By Chew Yee Kiat
    SINGAPORE, Nov 30 (Reuters) - Malaysian palm oil futures
edged lower on Friday and were heading for their third straight
monthly loss, with investors staying cautious after top analysts
warned that record high stocks will weigh on prices in the new
    But losses were limited by a surprise increase in Malaysian
exports in November to 1.66 million tonnes from 1.6 million
tonnes seen in October, easing concerns that record high stocks
would climb further for the month.
    "The export surprise is likely to limit the downside because
 end-stocks are going to be flat to slightly lower for November.
The market is also taking some time to digest the analysts'
comments," said a dealer with a foreign commodities brokerage in
    By the midday break, the benchmark February contract
 on the Bursa Malaysia Derivatives Exchange fell 0.6
percent to 2,372 ringgit ($780) per tonne. For the month, prices
were on track for a 5 percent loss.
    Total traded volumes were thin at 8,342 lots of 25 tonnes
each compared to the usual 12,500 lots, highlighting investor
    Technicals showed palm oil's target at 2,353 ringgit per
tonne remained unchanged, and a break below will lead to a
further drop to 2,288 ringgit, said Reuters market analyst Wang
    Palm oil prices need to trade at the 2,200 ringgit level for
the next 4-6 weeks to attract demand that could reduce and clear
stocks, said top industry analyst Dorab Mistry at the Indonesian
Palm Oil Association conference on Friday.
    Leading analyst James Fry of LMC International raised issues
such as uncertainty ahead of Chinese and possibly Indian import
rules, although Thomas Mielke of Oil World provided a more
upbeat forecast for palm oil prices.  
    Analysts and traders surveyed by Reuters at the conference
saw 2013 average palm oil prices at 2,500 ringgit, down 17.1
percent from 3,016 ringgit calculated so far for this year.
    In related markets, Brent crude slipped towards $110 a
barrel on Friday as critical U.S. budget talks to avert a
looming fiscal disaster appeared to have stalled, denting the
outlook for oil demand from the world's biggest consumer.
    In other vegetable oil markets, U.S. soyoil for December
delivery lost 0.1 percent in early Asian trade. The
most-active May 2013 soybean oil contract on the Dalian
Commodity Exchange edged up 0.2 percent.

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