Singapore Stock Market News

Plantations - Ambitious biodiesel mandate

StockFanatic
Publish date: Mon, 21 Oct 2013, 10:45 AM
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Our meeting with Indonesia's bio-energy director revealed that the country could raise its biodiesel usage by fourfold to 4m kl if the new biodiesel mandates for all sectors are met. This is positive for CPO price as it could raise CPO usage by 3.2m tonnes (11% of output).

But we suspect that its implementation in the non-transport sector may not be smooth and could face technical and logistic issues. We are, therefore, sticking with our conservative estimate of 2m kl usage in 2015 though we may revisit it if Pertamina succeeds in its tender for biodiesel. We retain our Neutral stance on the sector and our key picks, First Resources, IOI, Wilmar and AALI.
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