Highlights

AmInvest Research Reports

Author: AmInvest   |   Latest post: Fri, 4 Dec 2020, 10:14 AM

 

Plantation - B20 is delayed

Author:   |    Publish date:


  • Bloomberg reported that Malaysia will review the implementation of the B20 biodiesel policy in the transportation sector due to the coronavirus outbreak. The Plantation Industries and Commodity Ministry will meet with industry stakeholders and petroleum companies to discuss the implementation schedule of B20.
  • We believe that this is marginally negative for palm oil as an earlier implementation of B20 would have helped absorb or alleviate increases in palm inventory.
  • Malaysia’s palm stockpiles rose to 1.73mil tonnes as at end-March from 1.68mil tonnes as at end-February on the back of higher CPO production.
  • B20 was supposed to be implemented in stages, starting with Langkawi and Kedah in January 2020, Sarawak in April and Sabah in August. B20 was supposed to be rolled out in Peninsular Malaysia in June 2021.
  • We believe that the implementation of B20 in Sarawak, Sabah and Peninsular Malaysia has been delayed until further notice.
  • B20 is estimated to absorb about 1.26mil tonnes of palm oil annually. Currently, B10 in the transportation sector takes up about 761,000 tonnes of palm oil annually. The take-up rate of 1.26mil tonnes is about 6% of Malaysia’s estimated CPO production of 20.5mil tonnes for 2020F.
  • Apart from the coronavirus, we think that the implementation of B20 faces challenges due to a few reasons. First, price of CPO is US$237/tonne higher than gasoil currently. Hence, more subsidies are required to implement B20.
  • Second early this year, transport operators said that the cost of upgrading of vehicles to enable use of B20 is high. Fleet operators said that they have to invest between RM3,000 and RM4,000 per vehicle.
  • We maintain an Underweight stance on the sector and an average CPO price assumption of RM2,300/tonne for Malaysia in 2020F.

Source: AmInvest Research - 17 Apr 2020

Share this

Related Stocks

Chart Stock Name Last Change Volume 
GENP 9.90 -0.10 (1.00%) 254,100 
IJMPLNT 1.90 +0.05 (2.70%) 95,800 
UTDPLT 14.44 -0.10 (0.69%) 125,000 
IOICORP 4.48 +0.01 (0.22%) 699,700 
KLK 23.60 +0.04 (0.17%) 445,800 
SOP 4.05 0.00 (0.00%) 321,700 
THPLANT 0.555 +0.005 (0.91%) 614,600 
TSH 1.11 +0.01 (0.91%) 6,002,300 
SIMEPLT 5.08 -0.04 (0.78%) 565,700 
SWKPLNT 2.27 +0.06 (2.71%) 116,800 
TDM 0.315 +0.005 (1.61%) 34,115,900 
TAANN 3.09 0.00 (0.00%) 496,000 
JTIASA 0.925 +0.005 (0.54%) 8,414,500 
HSPLANT 1.81 -0.03 (1.63%) 273,300 

  Be the first to like this.
 
Plantermen B20 not feasible as a feedstock for biodiesel { much higher cross subsidy by government vs current low oil prices}
17/04/2020 9:04 AM


APPS
I3 Messenger
Individual or Group chat with anyone on I3investor
MQ Trader
View candlestick stock charts with Technical indicators
MQ Affiliate
Be rewarded by being an MQ Affiliate
 
 

546  656  538  392 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 YONGTAI 0.365+0.07 
 MTRONIC 0.135+0.015 
 HWGB 0.88+0.035 
 SAPNRG 0.125+0.005 
 AT 0.195+0.01 
 MTRONIC-WA 0.09+0.015 
 KNM 0.23+0.02 
 PHB 0.030.00 
 INIX 0.33+0.065 
 EAH 0.03-0.005 

FEATURED POSTS

1. The Equity Market Index Benchmark in Malaysia CMS
2. Trading Scenarios of Derivatives Bursa Derivatives Education Series
3. Derivatives 101 Bursa Derivatives Education Series
4. Why Trade FKLI? Bursa Derivatives Education Series
5. MQ Trader - Introduction to MQ Trader Affiliate Program MQ Trader Announcement!
PARTNERS & BROKERS