Singapore Stock Market News

ASEAN Plantations - Malaysia implements B7

StockFanatic
Publish date: Wed, 29 Oct 2014, 12:42 PM
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We are positive on Malaysia's plans to start implementing the use of B7 biodiesel in stages starting Nov as this will boost the country's usage of palm oil. We estimate that the rollout could raise the country's palm oil demand by 263k-390k tonnes per annum, or 1-2% of the total palm oil production in 2013. As this equates to an additional monthly CPO demand of only 22k-33k tonnes, we keep our average CPO price forecast at RM2,390 and RM2,460 per tonne for 2014 and 2015, respectively.

We also maintain our Neutral rating on the sector. Our key picks in the sector are First Resources, Astra Agro and SIMP.
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