Singapore Stock Market News

Plantations - Biodiesel to the rescue

StockFanatic
Publish date: Mon, 26 Aug 2013, 09:48 AM
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Indonesia's plan to raise biodiesel usage to B10 as part of its measures to reduce its current account deficit is good news for regional planters and Indonesian biodiesel producers. But there are challenges in implementation, i.e. pricing, enforcement and distribution.

We estimate that this could raise Indonesia's biodiesel consumption by 1.26m tonnes, which is positive for CPO price (benefiting regional planters) and Indonesia's biodiesel producers (Wilmar and First Resources). We expect this news to keep CPO price firm during the high production season. We remain Neutral on the sector, with Wilmar, First Resources and IOI being our top picks.
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