AmInvest Research Reports

Plantation - Export ban excludes crude palm oil and RBD palm oil

AmInvest
Publish date: Tue, 26 Apr 2022, 09:42 AM
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Investment Highlights

  • Indonesia’s export ban excludes crude palm oil and RBD palm oil. Bloomberg quoted sources as saying that Indonesia will only halt exports of bulk and packaged RBD palm olein. Exports of crude palm oil and RBD palm oil will still be allowed.

Comments:

  • Reprieve for buyers of palm oil. As Indonesian companies are allowed to export crude palm oil and refined palm oil, we believe that Indonesia’s export ban will not be as detrimental as previously feared. Buyers such as India will still be able to purchase palm oil in crude and refined form. In 2020/2021, India bought 7.5mil tonnes of crude palm oil and 686,340 tonnes of RBD palm olein. CPO prices swung into the red yesterday as news that Indonesia’s ban excluded CPO and refined palm oil, broke out.
  • Indonesia’s CPO export levy will still be intact. As exporters are allowed to sell crude palm oil, the CPO export levy will still be used to subsidise Indonesia’s B30 biodiesel policy. According to Intertek, Indonesia exported about 6.2mil tonnes of refined palm oil and 2.7mil tonnes of crude palm oil in 2021. The country’s exports of RBD palm olein amounted to 9.3mil tonnes in 2021. In March 2022, Indonesia’s exports of refined palm oil were 571,707 tonnes while exports of RBD palm olein were 578,540 tonnes. Exports of crude palm oil amounted to 66,781 tonnes.
  • More exports of palm in crude and refined form. We believe that the plantation companies in Indonesia will switch towards exports of crude and refined palm oil instead of olein when the export ban takes place on 28 April 2022. We also think that the export ban is a temporary measure, which may be lifted after the Hari Raya festivities.
  • UNDERWEIGHT. We maintain our UNDERWEIGHT stance on the sector as CPO prices shrug off Indonesia’s export ban and gravitate towards expectations of the upcoming peak production period. The arrival of foreign workers in Malaysia in 2H2022 is expected to boost CPO production. Currently, Oil World is expecting Malaysia’s CPO production to improve by 1mil to 1.1mil tonnes in 2022F from 18.1mil tonnes in 2021.

 

Source: AmInvest Research - 26 Apr 2022

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Discussions
Be the first to like this. Showing 7 of 7 comments

L2

RBD Palm OLEIN curb of chunky 30-40% underplayed by IBs(RHB/AMI/MIB) and news (western Bloomberg/Reuters) for obvious self-serving purposes? Obviously blind to the simple math?

---1---Bloomberg:
"Exports of crude palm oil and RBD palm oil will still be allowed, according to people familiar with the matter. RBD olein accounts for 30% to 40% of Indonesia’s total palm oil exports."

https://www.thestar.com.my/aseanplus/aseanplus-news/2022/04/25/indonesia-to-allow-key-palm-oil-exports-sparking-price-swings-and-risks-overflowing-of-storage

https://klse.i3investor.com/blogs/kianweiaritcles/2022-04-25-story-h1622258975-Indonesia_to_allow_key_palm_oil_exports_sparking_price_swings_and_risks.jsp

---2---Reuters:
"According to Refinitiv Eikon, Indonesia exported an average of roughly 620,000 tonnes per month of RBD in 2021, compared to an average of around 100,000 tonnes of crude palm oil."

"According to data from Indonesia's palm oil association (GAPKI), exports of processed CPO in 2021 stood at 25.7 million tonnes, or 75% of total exports of palm products. CPO exports were 2.74 million tonnes in 2021, or 7.98% of the shipments.

In January and February this year, processed CPO exports were 3.38 million tonnes or 79% of exports, while CPO exports were 90,000 tonnes, 2% of the total shipped."

https://www.reuters.com/world/asia-pacific/indonesia-export-ban-will-not-include-crude-palm-oil-sources-2022-04-25/

https://klse.i3investor.com/blogs/kianweiaritcles/2022-04-25-story-h1622259128-Indonesia_export_ban_will_not_include_crude_palm_oil_say_sources.jsp

2022-04-26 10:17

Johnzhang

CPO and refined palm oil are in one direct chain. How to restrict refined palm oil export without restricting CPO export ?

2022-04-26 11:11

investor2021trading

CPO or crude palm oil r from ffb cooked n crushed during mill processing, very different from refined palm oil which r CPO sent to palm oil refineries to b process for cooking oil!

2022-04-26 11:28

stockraider

This means not export of RBD but CPO can export loh!

But the existing rule of at least 20% CPO must sold for local use still applicable loh!

2022-04-26 11:39

investor2021trading

it's impossible to force all CPO produced from oil palm plantations to be processed into cooking oil for Indonesians consumption! d palm oil refineries in Indonesia will never b able to absorb all d CPO!

That's why they initially planned 20% to b for d refineries n 80% for exports!

2022-04-26 11:40

L2

EU cartel and US long bo chap; nil or no good appointments forthcoming for pm Z; meet local IBs who choose to eyeball and headline the ant and blindside the stomping herd? likely no joy there either.

2022-04-26 12:25

L2

CPO --> RBD palm oil --->> RBD palm olein. Block that last 30-40%, see what happens to the other two.

2022-04-26 12:28

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