Singapore Stock Market News

Plantations - Reinforcing the biodiesel plan

StockFanatic
Publish date: Thu, 02 May 2013, 03:22 PM
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Our meeting with MPOB and Pemandu revealed that Malaysia is pushing ahead with its plans to adopt the B5 biodiesel mandate by July 2014 and B10 soon after. We sensed that most of the teething problems that have delayed its implementation have been addressed.

When fully implemented, this will lead to additional take-up of 400k-900k tonnes or 2-5% of the country's palm oil output. We are positive on this but expect it to have an impact on CPO price in 2014, at the earliest. As such, we are keeping our CPO price forecasts and Neutral call on the sector. Our top sector pick is Wilmar.
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