- Last week, IJM Plantations and Genting Plantations reported that their FFB production climbed 19.4% MoM each in July.

- Assuming a CPO production growth of 15% and a 5% increase in exports, we estimate Malaysia’s palm oil inventory at 1.7mil to 1.8mil tonnes for the month of July 2013.

- Consensus is looking at a palm oil inventory of 1.65mil tonnes. Palm oil shipments from Malaysia improved from 4.2% to 5.3% in July according to independent cargo surveyors.

- The increase in palm oil stocks would be the first since inventory stood at a high 2.63mil tonnes in December 2012.

- It would also appear that palm oil production has recovered a month earlier than expected. MPOB (Malaysian Palm Oil Board) is scheduled to release the country’s palm oil statistics today.

- On the foreign front, it appears that palm oil production in Indonesia may not be as strong as expected this year.

- In its recent results announcement, Golden Agri Resources said that its FFB production edged down by 2% YoY in 1HFY13. This was mainly due to an 11% fall in the plasma output.

- We understand that palm oil production in areas like Sumatra, Papua and Jambi were weak. Conditions were dry in June.

- Wilmar International reported that its FFB production inched up by only 1% YoY in 1HFY13.

- The lacklustre growth was attributed to the dry weather in Kalimantan and Sumatra and a low crop trend in Sarawak.

- Incidentally, Wilmar’s new plantings were 5,129ha in 1HFY13, which were significantly higher than the 586ha achieved in 1HFY12.

- A plantation company, which bucked the weak trend in palm oil production in Indonesia, is BW Plantation, which reported a 20.1% increase in FFB production in 1HFY13. BW’s landbank is in Kalimantan.

Source: AmeSecurities