Upstream – Produce FFB

Plantation of palm oil trees to produce fresh fruit bunch.

Midstream – Mills to convert FFB to CPO and PKO

The FFB produced are processed at mills to produce crude palm oil (“CPO”) and Palm Kernel Oil (“PKO”).

Total annual world supply of CPO in 2016 is approximately 58 million MT. Malaysia supply approximately 30% and Indonesia supply approximately 55% of the world supply of CPO. Malaysia’s annual contribution of CPO is approximately 17.3 million MT in 2016.

NEUTRAL view on oil palm plantation sector

From July 2016 to February 2017, the CPO price surged above RM 3,300 per MT. This is partly due to the dry weather, El Nino conditions.

But now, the price is hitting a one year low at RM 2,345 on December 14, 2017

Industry sources expects the price shall trade in the range of RM 2,500 to RM 2,600 per MT. Hence, as compared with the higher pricing in 2016, the overall plantation sector is expected to be neutral.

Major importers of CPO are China, India and EU.

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